FAO: World food price index rises in Jan, at highest level since July 2014

FAO: World food price index rises in Jan, at highest level since July 2014

World food prices rose for an eighth consecutive month in January, hitting their highest level since July 2014, led by jumps in cereals, sugar and vegetable oils, the United Nations food agency said.

The Food and Agriculture Organization’s food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 113.3 points last month versus an upwardly revised 108.6 in December. The December figure was previously given as 107.5.

The Rome-based FAO also said in a statement that worldwide cereal harvests remained on course to hit an annual record in 2020, but warned of a sharp fall in stocks and signalled unexpectedly large import demands from China.

FAO’s cereal price index climbed 7.1% month-on-month in January, led higher by international maize prices, which soared 11.2%, some 42.3% above their level a year ago, buoyed in part by purchases by China and lower-than-expected U.S. production.

Wheat prices increased 6.8%, driven by strong global demand and expectations of reduced sales by Russia when its wheat export duty doubles in March 2021, FAO said.

Sugar prices jumped 8.1%, with worries about worsening crop prospects in the European Union, Russia and Thailand, and dry weather conditions in South America, pushing up import demand.

The vegetable oil price index increased 5.8% to reach its highest level since May 2012, pushed up in part by lower-than-expected palm oil production in Indonesia and Malaysia due in part to heavy rainfall. A rise in soyoil prices was fuelled by reduced export opportunities and prolonged strikes in Argentina.

Dairy prices rose 1.6%, underpinned by heavy Chinese purchases ahead of the upcoming New Year holiday, Reuters reported.

The meat index posted a 1.0% gain, led by brisk imports of poultry, especially from Brazil, amid avian influenza outbreaks that have hampered exports from several European countries.