Global food prices hit new 10-year high in October -FAO

PARIS, Reuters

FILE PHOTO: A worker carries a bag of rice to a store outside Hanoi on November 26, 2013. Vietnam has offered the lowest price to supply 500,000 tonnes of rice to the Philippines, beating the grain supply from Thailand to increase stocks depleted by Typhoon Haiyan, the Manila grain procurement agency said on Tuesday. REUTERS / Kham

The Food and Agriculture Organization (FAO) food price index, which tracks the international prices of the world’s most widely traded food products, averaged 133.2 points last month, up from a revision of 129.2 for September.

September’s figure was previously 130.0.

The October reading was the index’s highest since July 2011. On an annual basis, the index was up 31.3% in October.

The prices of agricultural raw materials have risen sharply over the past year, driven by reduced harvests and strong demand.

The FAO cereal price index rose 3.2% in October compared to the previous month. This was led by a 5% rise in wheat prices, which climbed for a fifth consecutive month to reach their highest level since November 2012, FAO said.

“The more limited availability in world markets due to lower harvests among major exporters, particularly Canada, the Russian Federation and the United States of America, continued to exert upward pressure on prices, “FAO said of wheat.

Wheat futures started at new highs in November, with US prices at new highs since 2012 and first month Paris futures at a record high as import demand remained strong . [GRA/] [GRA/TEND]

Global vegetable oil prices jumped 9.6% on the month to a record high, supported by a further rise in palm oil prices as labor shortages in Malaysia continue to hamper production, FAO said. [POI/]

In contrast, world sugar prices fell 1.8% in October, ending a series of six consecutive monthly increases, according to the FAO.

The Rome-based FAO has reduced its projection for world cereal production in 2021 to 2.793 billion tonnes, from 2.8 trillion estimated a month ago, according to its outlook for grain supply and demand.

This mainly reflected lower wheat production estimates for Iran, Turkey and the United States, offsetting an increased forecast for coarse grain production.

The expected global cereal production would still be a record high, but be lower than projected demand, leading to a decline in forecast cereal stocks, the FAO said.

Demand was supported by a higher projection of world grain trade to a new record, bolstered by increased wheat trade.

Reporting by Gus Trompiz; Editing by Nick Macfie

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