Fueled by surging vegoils, world food commodity prices jumped to the highest in 18 months in October.
The Food and Agriculture Organization of the United Nations on Friday reported that its food price index averaged 127.4 points last month. That is up 2% from September, 5.5% above October 2023 and the highest since April 2023. The index saw a strong rise in
September as well, up 2% from August and hitting its highest since July 2023 due to strengthening sugar prices.
The FAO food price index tracks monthly changes in the international prices of a set of globally traded food commodities.
Much of the rise in the overall food index in October was due to a 7.3% month-over-month increase in the vegetable oil index. Driven mainly by production concerns, prices for palm, soy, sunflower and rapeseed oil all increased last month, pushing the vegoil index to a two-year high.
International palm oil prices increased for the fifth consecutive month in October, largely due to concerns over lower-than-expected outputs coinciding with prospective seasonal production declines in key producing countries in Southeast Asia. Similarly, global sunflower and rapeseed oil prices continued to rise, mainly underpinned by prospects of subdued supplies due to lower expected production in 2024-25.
The cereal price index also climbed in October, rising 0.9%, led by increasing wheat and corn prices. Global wheat prices were affected by unfavorable weather conditions in major northern hemisphere exporters as well as the re-introduction of an unofficial price floor in the Russian Federation and rising tensions in the Black Sea region. World corn prices were boosted in part in part by strong domestic demand and transport challenges in Brazil due to low river levels.
The sugar price index was up 2.6% in October amid persistent production concerns, while the dairy price index gained 1.9%. Bucking the general upward trend, the meat price index dropped by 0.3% from September, mainly due to lower pig meat prices resulting from increased slaughter rates in Western Europe amid weak domestic and international demand.
Despite October’s rise, the overall FAO food price index remained 20.5% below its March 2022 peak, following the Russian invasion of Russia.
Click here to see more...