World food prices reached a 1.5-year high in October

According to the UN FAO, world food prices reached a 1.5-year high in October due to a sharp rise in vegetable oil prices.

 

Thus, the FAO Food Price Index in October grew by 2% compared to September to 127.4 p, which is 5.5% higher than the October 2023 figure, but 20.5% lower than the record level of March 2022.

 

The vegetable oil price index rose 7.3% to a 2-year high. All major types of oils rose in price on expectations of a reduction in production.

 

The grain price index rose by 0.9% against the background of rising export prices for wheat and corn. Wheat prices rose as a result of unfavorable weather in the northern hemisphere, tensions in the Black Sea region and the repeated (albeit unofficial) introduction of a minimum price in the Russian Federation. Corn prices rose due to low water levels in rivers and logistics problems in Brazil amid strong domestic demand. Meanwhile, rice prices fell 5.6% on forecasts of increased competition among exporters after India lifted restrictions on rice exports.

 

The sugar price index rose 2.6% on expectations of reduced production in Brazil in 2024/25 due to drought. Rising oil prices will increase the processing of sugarcane into ethanol, which will support sugar prices, but they will remain under pressure from a weaker Brazilian real against the US dollar.

 

The price index for dairy products grew by 1.9%, and is 21.4% higher than in October 2023. The increase in world prices for cheese and butter was partially offset by a decrease in quotations for milk powder.

 

The meat price index fell by 0.3%. Pork prices fell due to increased production in Western Europe amid weak demand. World poultry prices also declined, while lamb prices remained stable and beef prices increased moderately due to increased purchases.

 

We will remind that in September, the FAO Food Price Index grew by 3% compared to August to 124.4 p, which was 2.1% higher than in September 2023.