Global food prices at highest level in 10 years

According to the Food and Agriculture Organisation of the United Nations (FAO), food prices rose in May for the twelfth consecutive month. They have reached their highest level since September 2011.

Maize prices almost doubled year-on-year

The FAO food price index, which records price changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 127.1 points last month, up from a revised 121.3 in April. This increase is the highest monthly increase in ten years. On an annual basis, prices rose by as much as 39.7 per cent, writes Reuters.

According to the FAO, the grain prices rose by 6 per cent in May and is now 36.6 per cent higher than a year ago. Maize has even become almost 90 per cent more expensive in the same period. However, the UN organisation added that prices fell again at the end of the month, driven by the improved manufacturing outlook in the United States.

Palm oil

The vegetable oil price index increased by 7.8 per cent, mainly due to rising palm, soybean and rapeseed oil prices. Palm oil prices were fuelled by slow production growth in South East Asia, while the outlook for robust global demand, especially from the biodiesel sector, pushed up soybean prices.

Sugar prices rose 6.8 per cent due to fears of lower yields in Brazil, the world’s largest sugar exporter. Meat and dairy prices rose 2.2 per cent and 1.8 per cent respectively last month. The prices of butter fell for the first time in almost a year.

FAO also released its first forecast for world cereal production in 2021: it will exceed 2.8 billion tonnes – a new record and 1.9 per cent higher compared to 2020. World cereal consumption in 2021/22 appears to have increased by 1.7 per cent to just above the production level.