World food prices last month rebounded and remained near 10-year highs, led by an increase in the vegetable oils index, the UN food agency said on Thursday.
The UN Food and Agriculture Organization’s (FAO) food price index, which tracks the most globally traded food commodities, averaged 135.7 points last month against an upwardly revised 134.1 in December last year. That figure was previously given as 133.7.
Higher food prices have contributed to a broader surge in inflation as economies recover from the COVID-19 crisis, and the agency has warned that the higher costs are putting poorer populations at risk in countries reliant on imports.
Photo: AFP
The Rome-based agency also raised its projection of global cereal production last year to 2.793 billion tonnes from a previous estimate of 2.791 billion tonnes, its cereal supply and demand outlook showed.
The FAO said its vegetable oils index rose 4.2 percent month-on-month last month to reach record levels, shunted higher by reduced export availabilities and other supply-side constraints, especially labor shortages and unfavorable weather.
“There is a concern the impacts of these constraints will not ease quickly,” FAO Markets and Trade Division director Boubaker Ben-Belhassen said in a statement.
The agency’s dairy price index increased 2.4 percent, its fifth consecutive monthly rise, with the steepest gains registered by skim milk powder and butter.
The cereal price index rose just 0.1 percent, with maize posting a 3.8 percent gain on the month, spurred by worries about persistent drought conditions in South America, the agency said.
By contrast, world wheat prices fell 3.1 percent on the back of large harvests in Australia and Argentina.
Meat prices edged up last month, while sugar was the sole index to post a decrease, shedding 3.1 percent from the previous month due partly to favorable production prospects in major exporters India and Thailand, the FAO said.
It raised its projection of global cereal production last year because of larger-than-previously estimated wheat outputs in Argentina and Australia, along with slightly higher production estimates in Russia and Ukraine, it said.
“For 2022, global wheat plantings are expected to expand, buoyed by mostly conducive weather conditions in the northern hemisphere, although high input costs could deter a larger expansion,” it said.
World cereal utilization in 2021-2022 was forecast to rise 1.6 percent above the 2020-2021 level, reaching 2.805 billion tonnes.
The FAO’s forecast for world cereal stocks by the close of seasons this year was 824 million tonnes, up 2.2 million tonnes since November last year and only slightly lower than their opening levels.
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