The Food and Agriculture Organization of the United Nations (FAO) announced that international food prices rose for the third consecutive month in October, to reach a new high of a decade, again led by rising prices of cereals and vegetable oils.
The FAO, which tracks international prices for the world’s most traded food, averaged 133.2 points last month from a revised 129.2 points in September. The previous price given for September was 130.0 points.
The index for October was the highest since July 2011. On an annual basis, it increased by 31.3% in October.
Prices of agricultural products rose sharply last year as a result of harvest difficulties and strong demand.
The FAO Cereal Price Index rose 3.2% in October from the previous month, due to a 5% rise in cereal prices, which for the fifth consecutive month reached its highest level since November 2012, according to the FAO.
“The tighter availability on world markets due to declining yields in major exporting countries, particularly Canada, the Russian Federation and the United States, continued to push up grain prices,” the FAO said.
International vegetable oil prices rose 9.6% to a record high, supported by further strengthening in palm oil prices as labor shortages in Malaysia continued to hamper production, according to the FAO.
By contrast, international sugar prices fell 1.8% in October, ending six-month increases, according to the FAO.
The FAO cut its forecast for global cereal production in 2021 to 2.793 billion tonnes from 2.800 billion a month ago.
This mainly reflects the estimates for reduced cereal production in Iran, Turkey and the United States, which offset a growing forecast for secondary cereal production.
Expected global cereal production will continue to be a record but will fall short of projected demand, resulting in a drop in cereal stock forecasts, the FAO said.
Demand was supported by the forecast for an increase in world cereal trade to a new record, boosted by the increase in cereal trade.
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