Raw food prices hit a ten-year high again in September, according to the latest data from the United Nations Food and Agriculture Organization.
The FAO food price index (FFPI) averaged 130.0 points in September, 1.2% more than in August and 32.8% higher than in September 2020. The increasingly scarce supply and “robust” demand for varieties such as wheat and palm oil were responsible for the increase, according to the FAO.
The FFPI compiled by the FAO is a measure of the monthly change in the international prices of a basket of food. The last time the index hit a similar level was in 2011 when it hit 131.9.
The FAO grain price index rose by 2% in September compared to the previous month, with world wheat prices increasing by almost 4% – and even 41% higher than in the previous year – due to the dwindling export availability given the strong demand.
World rice prices also rose in September, while corn prices rose a modest 0.3% – an average of 38% more than last year – as improved global crop prospects and the start of harvests in the US and Ukraine largely offset the impact of the hurricane compensated for port disruptions in the United States.
„Among the major grains, wheat will be in the spotlight in the coming weeks as demand needs to be tested against the rapidly rising prices,” said Abdolreza Abbasian, FAO chief economist.
The organization’s vegetable oil price index rose 1.7% month-over-month – and about 60% compared to September 2020 – as international palm oil prices rose due to „robust” global import demand and concerns about the lack of migrant workers affecting production in Malaysia. reached a ten year high.
Separate data from the FAO suggest that world grain production is well on track to hit an all-time record of 2.8 billion tons in 2021. However, this is less than the expected consumption requirement in the 2021/22 marketing season.