Global food prices rose in January for the eighth consecutive month, led by cereals, vegetable oils and sugar, according to the Food and Agriculture Organization of the United Nations (FAO).
FAO's Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities and was released this week, averaged 113.3 points in January, marking a 4.3% increase from December 2020 and reaching its highest level since July 2014.
The FAO Cereal Price Index showed a sharp 7.1% monthly increase, led by international maize prices, which surged 11.2% and are now 42.3% above their January 2020 level, reflecting increasingly tight global supply amid substantial purchases by China and lower-than-expected production and stock estimates in the United States as well as a temporary suspension of maize export registrations in Argentina. Wheat prices rose 6.8%, driven by strong global demand and expectations of reduced sales by the Russian Federation when its wheat export duty doubles in March 2021. Robust demand from Asian and African buyers underpinned strong rice prices.
The FAO Vegetable Oil Price Index increased by 5.8% in the month to its highest level since May 2012. Drivers included lower-than-expected palm oil production in Indonesia and Malaysia due to excessive rainfall and ongoing shortages in the migrant labor force, and prolonged strikes in Argentina reducing export availability for soy oil.
The FAO Sugar Price Index was 8.1% higher than in December, as robust global import demand spurred concerns about lower availabilities due to worsening crop prospects in the European Union, the Russian Federation and Thailand, as well as drier-than-normal weather conditions in South America. Rising crude oil prices and a stronger Brazilian Real also provided support to international sugar prices.
The FAO Dairy Price Index increased by 1.6%, underpinned by China's high purchases ahead of the country's upcoming New Year holiday festivities amid seasonally lower exportable supplies in New Zealand.
The FAO Meat Price Index was up 1.0% from December, led by brisk global imports of poultry meat, especially from Brazil, amid avian influenza outbreaks that have constrained output and exports from several European countries.