Global food prices rose in May at their fastest monthly rate in more than a decade even as world cereal production is on course to reach a new record high, the Food and Agriculture Organisation (FAO) of the United Nations reported on Thursday.
The FAO Food Price Index averaged 127.1 points in May, 4.8 per cent higher than in April and 39.7 per cent higher than in May 2020.
A surge in the international prices of vegetable oils, sugar and cereals led the increase in the index, which tracks monthly changes in the international prices of commonly-traded food commodities, to its highest value since September 2011 and only 7.6 per cent below its all-time peak in nominal terms.
The FAO Cereal Price Index increased 6 per cent from April led by international maize prices which averaged 89.9 per cent above their year-earlier value. However, maize prices started to retreat at the end of May on improved production prospects in the United States.
International wheat prices also showed a late-month decline but averaged 6.8 per cent higher in May than in April while international rice quotations held steady.
The FAO Vegetable Oil Price Index gained 7.8 per cent mainly reflecting rising palm, soy and rapeseed oil quotations. Palm oil prices rose due to slow production growth in southeast Asian countries while prospects of robust global demand, especially from the biodiesel sector, drove soyoil prices higher.
The FAO Sugar Price Index increased by 6.8 per cent from April due largely to harvest delays and concerns over reduced crop yields in Brazil, the world”s largest sugar exporter, even as large export volumes from India contributed to easing the price surge.
The FAO Meat Price Index increased by 2.2 per cent from April with quotations for all meat types rising due to a faster pace of import purchases by China as well as rising internal demand for poultry and pig meats in the leading producing regions.
The FAO Dairy Price Index rose by 1.8 per cent in the month, averaging 28 per cent above its level of one year ago. The increase was led by solid import demand for skim and whole milk powders, while butter prices declined for the first time in almost a year on increased export supplies from New Zealand.
A new Cereal Supply and Demand Brief also released on Thursday offered FAO’s first forecast for world cereal production in 2021 — now pegged at nearly 2,821 million tonnes, a new record and a 1.9 per cent increase from 2020, led by a foreseen 3.7 per cent annual growth in maize output.
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