Global food prices rise in October for fifth consecutive month

Global food prices continued rising for the fifth consecutive month in October, led by cereals, sugar, dairy and vegetable oils, the Food and Agriculture Organisation of the United Nations has said.

This is according to the Food Price Index report published on Thursday which tracks international prices of the most commonly traded food commodities.

The FAO Food Price Index averaged 100.9 points in October up 3.1 per cent from September and 6.0 per cent above its value in October.

In the report, the index climbed 7.2 per cent from the previous month and 16.5 per cent above its value in October.

“The surge was mainly driven by wheat prices amid shrinking export availabilities, poor growing conditions in Argentina and continued dry weather affecting winter wheat sowing in Europe, North America and Black Sea region.

“Maize feed barley and sorghum prices also remained under upward pressure in October while those of rice subsided,” it said.

The report said, the index gained 1.8 per cent during the month, posting a nine-month high led by firmer palm and soy oil prices.

“By contrast, rapeseed oil prices declined moderately amid increased uncertainty regarding demand in the European Union (EU) Following the recent deterioration of the COVID-19 situation across the region.”

It also said: ”the FAO Dairy Price Index rose 2.2 per cent from September with cheese rising the most, followed by skim milk powder, whole milk powder and butter.”

“Prices increases in October reflected market tightening for near-term deliveries, underpinned by robust import demand from Asian and Middle Eastern markets,” the report said.

The FAO Sugar Price Index increased 7.6 per cent from September, a move largely influenced by the prospect of a lower sugar output in both Brazil and India, the two largest sugar producing countries in the world.

”The FAO Meat Prices Index by contrast declined 0.5 per cent from September, marking the ninth monthly decline since January, driven by drop in pig meat prices reflecting in part continued influence of the import restrictions imposed by China on Germany.

“Bovine and poultry meat prices also fell while prices of ovine meat rose on steady internal demand and low export supplies,” it said.

Forecast

Meanwhile, it said the global cereal output is still forecast at a record 2750 million tonnes, surpassing the 2019 output by 1.6 per cent.

“The reduction in the world coarse grains production forecast reflects lower expectations for the maize output in the European Union and Ukraine, where continued adverse weather has further reduced yield prospects.

“The global wheat production forecast for 2020 is also trimmed slightly the month on lower expectations in Ukraine and Argentina due to the impact of dry weather,” it said.