Global food commodity prices jumped the most in 18 months in September, driven in part by increasingly erratic weather in major production regions.
The Food and Agriculture Organization of the United Nations reported on Friday that its food price index - which tracks monthly changes in the international prices of a set of globally traded food commodities - averaged 124.4 points last month, up 3% from August and 2.1% higher than last year. However, the index remains below its all-time high of 159.3 points reached in March 2022 following the Russian invasion of Ukraine.
Sugar prices led the way higher with a 10.4% jump, but all commodities covered by the index, including cereals and vegetable oils, increased in September.
The FAO’s cereal price index increased 3% in September, as wheat and corn export values powered higher.
International wheat prices gained, due largely to what the FAO said were concerns over excessively wet conditions in Canada and the European Union, though this was partly offset by competitively priced supplies from the Black Sea region. Wheat production in the EU’s largest producer, France, is estimated down almost 25% this year - one of the worst harvests of the past 25 years - amid unrelenting rain that negatively impacted both yields and quality.
Higher corn prices were blamed on a lack of rain that has lowered water levels in the Mississippi River in the US and the Madeira River in Brazil. The drop in water levels has made it more difficult – and more costly – for those countries to ferry supplies to export positions.
In contrast to higher wheat and corn prices, the FAO’s all rice price index eased slightly in September (-0.7%) amid generally quiet trade.
As for the FAO’s vegetable oil price index, it was up 4.6% from August, with higher quotations across the board for palm, soy, sunflower and rapeseed oils. The rise in international palm oil prices was due to lower-than-expected production in major Southeast Asian producing countries, while the rebound in soyoil quotations was primarily due to lower-than-expected crushings in the US, the FAO said.
The sharp increase in the sugar price index was attributed to worsening crop prospects in Brazil due to drought and concerns that India’s decision to lift restrictions on sugarcane use for ethanol production may affect export availabilities from the country.
The FAO’s dairy price index was up 3.8% in September, while the meat index inched 0.4% higher.