The general index of food prices in January increased in annual terms by 4.7 points, or 4.3%, to 113.3 points; the indicator is growing for the eighth month in a row and reached the highest since July 2014, according to a press release from the Food and Agriculture Organization of the United Nations (FAO).
The FAO records an increase in the cost of all categories of goods, most notably for sugar, cereals, and vegetable oils. Thus, the sugar price index rose by 7 points (8.1%), 94.2 points, to a record since May 2017. The price increase is due to lower supply expectations based on crop species in the EU, Russia, and Thailand and due to dry weather in South America and the recent rise in oil prices, and the strengthening of the Brazilian real against the dollar. Brazil is the world’s largest sugar exporter.
In January, the grain price index rose by 8.3 points every month, or 7.1%, to 124.2 points. There is a sharp increase in world corn prices due to a general decline in supply and the dry weather in South America. As the FAO points out, wheat also rose in price, including due to “the expected reduction in sales volumes from the Russian Federation, where from March 2021, duties on wheat exports will double.”
The vegetable oil price index rose by 7.7 points (5.8%) to 138.8 points in December, the highest level since May 2012. According to the release, the index rose for the eighth month in a row with the rise in the price of palm, soybean, and sunflower oils. Palm oil has risen in price due to low production in Indonesia and Malaysia. In contrast, prolonged strikes in Argentina and a reduction in export supply have pushed up the soybean oil price. Sunflower oil is becoming more expensive due to the low yield, the FAO also notes.
In January, the price index for dairy products increased by 1.7 points (1.6%) to 111 points. Butter and whole milk powder rose in price due to large purchases in China before the Lunar New Year celebrations and a seasonal decline in New Zealand supplies. Simultaneously, the price of cheese fell against the background of low sales in Europe and the growth of its stocks in the United States.
The FAO price index for meat was 96 points (an increase of 0.9 points, or 1%); the indicator is growing for the fourth month in a row. The organization notes an increase in prices for all types of meat, most of all – for poultry meat, especially in Brazil, with active demand and limited exports from Europe.