FAO : food prices soars to a ten year high

Global food commodity prices rose in May at their fastest monthly rate to their highest value since September 2011, led by oils, sugar and cereals, the Food and Agriculture Organisation of the United Nations (FAO) has said.

Details of this were highlighted in the FAO Food Price Index report released on Thursday.

The index tracks the international prices of the most commonly traded food commodities.

The FAO Food Price Index averaged 127.1 points in May 2021, 4.8 per cent higher than in April and as much as 39.7 per cent above the same period last year.

“The May increase represented the biggest month-on-month gain since October 2010.

“It also marked the twelfth consecutive monthly rise in the value of the food prices Index to its highest value since September 2011, bringing the Index only 7.6 per cent below its peak value of 137.6 points registered in February 2011.

“The sharp increase in May reflected a surge in prices for oils, sugar and cereals along with firmer meat and dairy prices,” it said.

The report said the FAO Vegetable Oil Price Index averaged 174.7 points in May, gaining 7.8 per cent month-on-month and marking a twelfth consecutive monthly rise.

“The continued strength of the index mainly reflects rising palm, soy and rapeseed oil values.

“International palm oil quotations remained on an upward trajectory in May and reached their highest level since February 2011, as slow production growth in Southeast Asian countries together with rising global import demand, kept inventories in leading exporting nations at relatively low levels.

“As for soy oil, prospects of robust global demand, especially from the biodiesel sector, lent support to prices, while international rapeseed oil values were underpinned by continued global supply tightness,” the report said.

According to the report, the FAO Sugar Price Index averaged 106.7 points in May, up 6.8 per cent from April marking the second consecutive monthly increase and the highest level since March 2017.

“The rise in international sugar price quotations was mostly related to harvest delays and concerns over reduced crop yields in Brazil, the world’s largest sugar exporter, as the prolonged dry weather conditions impacted crop development.