Global food prices continued rising for the eighth conservative month in January, led by cereals, vegetable oils and sugar, the Food and Agriculture Organisation of the United Nations has said.
This is according to the Food Price Index report released on Thursday. The index tracks international prices of most commonly traded food commodities.
The FAO Food Price Index averaged 113.3 points in January, making a 4.3 per cent increase from December 2020 and reaching its highest level since July 2014.
In the report, the FAO Cereal Price Index showed a sharp 7.1 per cent monthly increase, led by maize prices, which surged 11.2 per cent and are now 42.3 per cent above their January 2020 level.
The FAO said this reflects the increasingly tight global supply amid substantial purchases by China and lower than expected production and stock estimated in the United States of America, as well as a temporary suspension of maize export registrations in Argentina.
“Wheat prices rose 6.8 per cent driven by strong global demand and expectations of reduced sales by the Russian Federation when its wheat export duty doubles in March 2021.
“Robust demand from Asian and African buyers underpinned strong rice prices,” it said.
The report said the FAO Vegetable Oil Price Index increased by 5.8 per cent in the month to its highest level since May 2012.
“Drivers included lower than the expected palm oil production in Indonesia and Malaysia due to excessive rainfall and ongoing shortages in the migrant labour force and prolonged strikes in Argentina reducing export availability for soy oil,” the report said.
It said the FAO Sugar Price Index was 8.1 per cent higher than in December as robust global import demand spurred concerns about lower availabilities due to worsening crop prospects in the European Union, the Russian Federation and Thailand as well as drier than normal weather conditions in South America.
“Rising crude oil prices and a stronger Brazilian Real also provided support to international sugar prices, ” it added.
According to the report, the FAO Dairy Price Index increased by 1.6 per cent underpinned by China’s high purchases ahead of the country’s upcoming New Year holiday festivities amid seasonally lower exportable supplies in New Zealand.
“Price quotations for skim milk powder (SMP) too rose, pressured by high import demand for spot supplies and lagging production activities in Western Europe.
“By contrast, cheese prices fell slightly from the highs registered in December 2020 due to limited internal sales in Europe coupled with a stock build-up in the United States of America,” it said.
The report said the FAO Meat Price Index was up 1.0 per cent from December led by the brisk global import of poultry meat especially from Brazil amid avian influenza outbreaks that have constrained output and exports from several European countries.
“Despite high purchases by China in the run-up to the country’s New Year celebrations bovine and pig meat price quotations increased only slightly as global supplies remained adequate to meet demand.
“Ovine meat prices firmed for a fourth consecutive month driven by tight supplies from Oceania and strong demand from China,” the report said.
Forecast
Meanwhile, it said the global cereal utilisation in 2020/21 is now forecast at 2761 million tonnes up 52 million tonnes from the previous season.
“Leading the increase is robust use of coarse grains for feed in China.
“Worldwide utilisation of wheat and rice are forecast to rise by 0.7 per cent and 1.8 per cent respectively during the year ahead,” it said.
