World Food Prices Up Sharply on the Year: FAO

World food prices have soared by about one-third over the past year, boosted by rising prices for wheat and other global staples.

The monthly Food Price Index of the Food and Agriculture Organization of the United Nations (FAO) averaged 130 points in September – up a modest 1.2% from the previous month but 32.8% above the same month a year earlier. (The index tracks monthly changes in the international prices of commonly-traded food commodities).

The FAO Cereal Price Index in September increased by 2% from the previous month, with world wheat prices up almost 4% - and as much as 41% higher than a year earlier – due to tightening export availabilities amid strong demand. Corn prices were up 38% year-over-year while world rice prices were also higher.

“Among major cereals, wheat will be the focus in the coming weeks as demand need to be tested against fast rising prices,” FAO Senior Economist Abdolreza Abbassian said in a release Thursday.

The FAO Vegetable Oil Price Index was up 1.7% on the month – and about 60% from September 2020 – as international palm oil prices reached 10-year highs due to robust global import demand and concerns over migrant labour shortages impacting production in Malaysia. World rapeseed oil prices also appreciated markedly.

Even sugar has moved sharply higher, with the FAO Sugar Price Index up 0.5% from August and 53.5% from a year earlier, underpinned by adverse weather conditions and higher ethanol prices in Brazil, the world’s largest sugar exporter.

As for meat, the FAO index was virtually unchanged in September from the previous month but still up 26.3% on an annualized basis. Ovine and bovine meat quotations rose due to tight supply conditions, while those for poultry and pig meat declined amid ample global supply volumes of the former and lower demand for the latter in China and Europe.