Economy

Global food-price surge led by increase in cost of meat and vegetables


World food prices rose strongly in November, lifted by big jumps in the price of meat and vegetable oils, despite slightly lower cereals prices, according to the United Nations food agency.

The Food and Agriculture Organisation (FAO) food price index – which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar – hit a 26-month high in November, averaging 177.2 points, up 2.7 per cent on the previous month and up 9.5 per cent year-on-year.

The FAO also predicted cereal production would reach an all-time high of 2.7 billion tonnes in 2019, up 0.4 per cent from its last forecast.

The cereal price index fell 1.2 per cent to 162.4 points, with large export supplies and strong competition among world producers weighing on wheat prices. The cost of rice fell to six-month lows as new crop arrivals added pressure.

The vegetable-oil price index rose 10.4 per cent to 150.6 points, reaching its highest since May 2018, led by firmer palm-oil prices, which strengthened on robust import demand, increased biodiesel use and concerns over possible supply shortages.

The meat price index registered its largest month-on-month increase since May 2009, rising 4.6 per cent from October to 190.5 points, with beef and sheep meat rising most strongly, lifted by demand from China and year-end holiday demand.

The sugar price index averaged 181.6 points, up 1.8 per cent from October, led by expectations of higher demand.

The FAO dairy price index averaged 192.6 points, only marginally up from October, after two months of declines.

The agency raised its forecast for global cereal production in 2019 by 0.4 per cent, estimating world cereal output at 2.7 billion tonnes, compared with 2018 levels.

Wheat output went up 4.8 per cent to 766.4 million tonnes.

Global rice production reached 515 million tonnes, up 1.6 million tonnes from the previous forecast, implying a 0.5 percent fall from the 2018 all-time high, the agency said.

Reuters


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