This year’s record food crop will still fall short of global demand, and as a result, grains and vegetable oil prices have reached the highest levels in ten years, the United Nations’ Food and Agriculture Organization (FAO) said in a recent report.
The FAO food price index follows the international prices of most globally traded foods, averaging 130.0 points last month, the highest value since September 2011, according to the agency. This value was 128.5 for the August revision.
Year-over-year prices rose by 32.8 percent in September. Agricultural commodity prices have risen sharply over the past year, fueled by declining yields and Chinese demand. The FAO grain price index rose two percent in September from the previous month. This was due to an increase in wheat prices of almost four percent, in the face of strong demand and declining export availability.
“Among the main cereals, wheat will be the focus in the coming weeks, as demand has to be weighed against rapidly rising prices,” said Abdolreza Abbassian, chief economist at FAO.
According to the FAO, world vegetable oil prices have risen 1.7 percent in the past month alone and have risen about 60 percent year-on-year, as palm oil prices have risen dramatically due to strong import demand as well as labor shortages in Malaysia.
Palm oil futures prices continued to rise in early October, reaching a record as the upturn in crude oil markets provided additional support for vegetable oils used in biodiesel.
According to the FAO, global sugar prices rose by 0.5 percent in September due to unfavorable crop conditions, raising concerns about the situation in Brazil, the largest exporter. In terms of grain production, the FAO forecast a record world harvest of 2.8 trillion tonnes in 2021, a slight increase from its previous forecast of 2.788 trillion tonnes a month ago. Global cereal stocks are expected to decline in 2021/22, the FAO added.