Global food prices rise for fourth consecutive month

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 134.4 points in November, up 1.2% from October and 27.3% higher than its level one year ago.

The Cereal Price Index averaged 141.5 points in November, up 3.1% from October and 23.2% above its level one year ago. Strong demand amid tight supplies, especially of higher quality wheat among major exporters, continued to lift wheat prices for a fifth consecutive month, to their highest level since May 2011. Maize export prices rose slightly, and international rice prices remained broadly steady, while wheat prices hit their highest level since May 2011. The increase reflected strong demand amid tight supplies, especially of higher quality wheat, while prices were also supported by concerns about untimely rains in Australia and uncertainty regarding potential changes to export measures in the Russian Federation.

The Vegetable Oil Price Index averaged 184.6 points in November, down 0.2% from the record high registered in the previous month. The slight decrease reflected somewhat lower values for soy and rapeseed oils, while quotations for palm oil remained virtually unchanged. International palm oil prices maintained their firmness in November, with the downward pressure linked to rising concerns over the impact of a resurgence in COVID-19 cases largely offset by the support stemming from the anticipation of production slowdowns in major producing countries. As for soy and rapeseed oils, world prices retreated moderately, broadly softened by demand rationing. Meanwhile, lower crude oil values also weighed on vegetable oil prices.

The Dairy Price Index averaged 125.5 points in November, up 3.4% from October and 19.1% above its level in the same month last year. In November, international price quotations for butter and milk powders rose sharply for the third consecutive month, driven by tight global export availabilities and depleted stocks, as deliveries declined in several large milk-producing countries in Western Europe, coinciding with lower-than-anticipated output in Oceania. Strong global import demand persisted amid buyers’ efforts to secure spot supplies in anticipation of tightening markets, adding further upward pressure on prices, notwithstanding market uncertainty over near-term demand caused by increasing COVID-19-related social restrictions. Cheese quotations rose slightly, reflecting increased demand and shipping delays that hindered sales from global suppliers.

The Sugar Price Index averaged 120.7 points in November, up 1.4% from October, reversing most of the previous month’s decline and reaching levels nearly 40% above those registered in the same month last year. The November rebound in international sugar price quotations was mainly prompted by higher ethanol prices, which encouraged a greater use of sugarcane for ethanol production in Brazil, the world’s largest sugar exporter. Further support to world sugar prices was provided by stronger global import demand, prompted by lower freight costs. Overall, however, the upward pressure on world sugar prices was limited by large shipments from India and the positive outlook for sugar exports by Thailand.

The Meat Price Index averaged 109.8 points in November, down 0.9% from October, falling for the fourth consecutive month, though still 17.6% above its value in the corresponding month a year ago. In November, international quotations for pig meat fell for the fifth consecutive month, underpinned by reduced purchases by China, especially from the European Union. Ovine price quotations also fell steeply on increased exportable supplies, mainly from Australia. Meanwhile, international bovine meat prices remained stable, as decreased quotations for Brazil’s meat were offset by higher Australian export values, reflecting low cattle sales for slaughter amid high herd-rebuilding demand. Poultry meat prices were also largely stable, as global supplies seemed adequate to meet demand, despite supply-side constraints, especially shipping container shortages and avian flu in Europe and Asia.