On Thursday, the Food and Agriculture Organization (FAO) of the United Nations food agency said that the world food prices rose considerably in November, due to the big jump in meat and vegetable oil prices. However, prices of cereals were slightly lower than those of meat and vegetable oil.
FAO Food Price Index
The FAO food price index is a measure of monthly changes for a basket of cereals, oilseeds, dairy products, meat, and sugar. In November, the food price index rose by 2.7% averaging 177.2 points, which is the highest in the last 26-month. The points showed an increase of 9.5% when calculated on a year-on-year basis.
FAO also anticipated that cereal production would hit an all-time high of 2.714 billion tons in 2019, up 0.4% from its last forecast.
The cereal price index decreased by 1.2% to 162.4 points due to large export supplies and strong competition among world producers. Rice prices fell to six-month lows, with new crop arrivals adding to the pressure.
The vegetable oil price index increased by 10.4% to 150.6 points, hitting the highest point since May 2018, along with palm oil prices. The rise in prices was attributed to robust import demand, increased biodiesel use, and concerns over possible supply shortages.
The meat price index registered its highest month-on-month elevation since May 2009, rising 4.6% from October to 190.5 points. Prices of beef and sheep were the highest due to the surge in demand for these meats from China and the year-end holiday.
The sugar price index rose by 1.8% from October averaging 181.6 points, led by expectations of higher demand.
After two months of declines, the FAO Dairy Price Index averaged 192.6 points increasing marginally from October.
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