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8 Oct, 2021 11:40

Global food prices reach record high in September amid harvest issues and rising demand for vegetable oils, sugar & cereals

Global food prices reach record high in September amid harvest issues and rising demand for vegetable oils, sugar & cereals

The world’s food price index in September rose for the second consecutive month to its highest level in 10 years, data from a press release of the Food and Agriculture Organization of the United Nations (FAO) shows.

FAO's food price index, which tracks global prices of the most internationally traded foods, rose 130 points last month to its highest level since September 2011. In total, food prices were up 32.8% on a year-on-year basis.

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The food agency mainly attributes this growth to price hikes in vegetable oils, cereals and sugar, brought about by harvest troubles and rising demand.

The price index for vegetable oil increased by 1.7% in September alone, with a year-on-year rise of about 60%, led by a higher cost of palm oil due to concerns over labor shortages in Malaysia.

The cereal price index rose by 2%, with wheat gaining the most as a result of reduced export supply amid strong global demand. The agency projected a record global cereal production of 2.8 billion tons in 2021, but noted it would still be outpaced by consumption. 

Sugar was up 0.5%, mainly due to poor weather in Brazil, the world's largest sugar exporter. Sugar’s gains, however, may be offset by a favorable production outlook in India and Thailand, FAO said.

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The price index for dairy products in September was also on the rise, with skimmed milk powder and butter showing major gains.

The meat price index continued to rise for the twelfth straight month, with lamb and beef at the helm. Poultry prices have declined, as a result of increased supply in the global market. Pork prices across the globe were also down, driven by low import demand from both China and Europe.

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