Global food commodity prices skyrocket to 6-year high

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 105 points in November 2020, up 4 points (3.9%) from October and 6.4 points (6.5%) higher than its value one year ago. The November increase not only marked the biggest month-on-month rise since July 2012, it also resulted in the index reaching its highest level since December 2014.

The Cereal Price Index averaged 114.4 points in November, up 2.7 points (2.5%) from October and as much as 19 points (19.9%) higher than its November 2019 value. The latest increase marked the fifth consecutive monthly rise in the value of the index. Wheat export prices rose, linked to reduced harvest prospects in Argentina, as did maize prices on account of lower output expectations in the United States and Ukraine as well as large purchases by China. International rice prices held steady during the month.

The Vegetable Oil Price Index averaged 121.9 points in November, gaining a staggering 15.4 points (or 14.5%) month-on-month and reaching its highest level since March 2014. The rally mainly reflects additional spikes in palm oil prices, combined with further increases in soy, rapeseed and sunflower seed oil values. International palm oil price quotations rose for a sixth consecutive month, underpinned by sharp contractions in world inventory levels, as smaller than customary output in major producing countries coincided with firm global import demand.

The Dairy Price Index averaged 105.3 points in November, up 0.9 points (0.9%) month-on-month, continuing the upward trend registered in recent months and nearing an 18-month record high. The latest rise was largely driven by firmer butter and cheese prices, reflecting steady increases in global import demand and a surge in retail sales in Europe coinciding with the region’s milk production reaching seasonal lows. By contrast, following six months of consecutive increases, skim milk powder prices dropped due to a slower pace of purchases in Asia, especially China, coupled with increased global export availabilities, including India’s powder surpluses.

The Sugar Price Index averaged 87.5 points in November, up 2.8 points (3.3%) from October, representing the second consecutive monthly increase. The increase in international sugar quotations in November was mainly due to growing expectations of a global production shortfall in the upcoming marketing season as unfavorable weather conditions drove weaker crop prospects in the European Union, the Russian Federation and Thailand.

The Meat Price Index averaged 91.9 points in November, up 0.8 points (0.9%) month-on-month, marking the first increase since January, but still 14.6 points (13.7%) below its value in the corresponding month last year. Prices of bovine, ovine and pig meats all increased, while those of poultry meat declined.