UN: World food prices hit 10-year peak

Building from a two-month rise, global food prices in September hit their highest monthly average since October 2011, according to the UN Food and Agriculture Organization (FAO) on Thursday.

The monthly FAO Food Price Index averaged 130 points, rising 1.5 points or 1.2% from August driven by tightening supply conditions and robust demand for staples such as wheat and palm oil.

This September’s figure in the trade-weighted index, which tracks international market prices of five major food commodity groups, was 32.8% higher than in September 2020, the FAO noted.

The cereal price index in September climbed 2% from August, with a strong rise in world wheat prices due to tightening export availabilities amid strong demand.

“Among major cereals, wheat will be the focus in the coming weeks,” said FAO Senior Economist Abdolreza Abbassian, noting that demanded would need to be tested against fast-rising prices.

The FAO Vegetable Oil Price Index went up by 1.7% as international palm oil prices reached 10-year highs led by robust global import demand and concerns over below-potential production in Malaysia as the Southeast Asian nation faces a shortage of migrant labor.

Last month, the Dairy Price Index increased by 1.5% from August over solid import demand and seasonal factors in Europe and the Oceania region driving up international quotations for all dairy products, especially butter, said the organization.

The FAO Sugar Price Index posted a slight month-on-month rise of 0.5% in September, as bad weather conditions and higher ethanol prices in Brazil fueled concerns over a reduced output by the world’s largest sugar exporter.

The Meat Price Index remained unchanged in September from the previous month.