World food prices have “surged to a new peak” reaching their highest level since July 2011, the Food and Agriculture Organization (FAO) of the UN has reported.
The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of food commodities, is up 3% from September, rising for a third consecutive month.
Food prices
The dairy price index rose by 2.6 points from September, influenced by generally firmer global import demand for butter, skim milk powder and whole milk powder amid buyers’ efforts to secure supplies to build stocks.
By contrast, cheese prices remained largely stable, as supplies from major producing countries were adequate to meet global import demand.
Global meat price slipped 0.7% from its revised value in September, marking the third monthly decline.
International quotations for pig and bovine meats fell amid reduced purchases from China of the former and a sharp decline in quotations for supplies from Brazil of the latter.
By contrast, poultry and ovine meat prices rose, boosted by high global demand and low production expansion prospects.
The vegetable oil price index went up 9.6% in October, hitting an all-time high.
The increase was driven by firmer price quotations for palm, soy, sunflower and rapeseed oils.
Palm oil prices rose for a fourth consecutive month in October, largely underpinned by persisting concerns over subdued output in Malaysia due to ongoing migrant labour shortages.
Record cereal output in 2021 but stocks set to decline
The cereal price index in October increased by 3.2% from the previous month, with world wheat prices rising by 5% amid tightening global availabilities due to reduced harvests in major exporters, including Canada, Russia and the US.
International prices of all other major cereals also increased month-on-month.
Despite an expected record world cereal production in 2021, global cereal inventories are seen heading for a contraction in 2021/22, according to new forecasts in the FAO’s Cereal Supply and Demand Brief.
The forecast for world cereal output in 2021 is now pegged at 2.7 billion tonnes, down by 6.7 million tonnes since the previous report in October, largely due to cuts to the estimates of wheat production in Iran, Turkey and the US.