Rapid rise in global food prices in May
04 June 2021, New Delhi: Global food prices rose in May at their fastest monthly rate in more than a decade, even as world cereal production is on course to reach a new record high, the Food and Agriculture Organisation (FAO) of the United Nations said on Thursday.
The FAO Food Price Index averaged 127.1 points in May, 4.8% higher than in April and 39.7% higher than in May 2020. A combination of factors have been attributed to the sharp increase including rising demand, production delays, disruption in harvest and supply bottlenecks. A surge in international prices of vegetable oils, sugar and cereals led to increase in the index, which tracks monthly changes in international prices of commonly traded food commodities, to its highest value since September 2011 and only 7.6% below its all-time peak.
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The FAO Cereal Price Index increased 6.0% from April, led by international maize prices, which averaged 89.9% above their year-earlier value. However, maize prices started to retreat at the end of May, mostly on improved production prospects in the US. International wheat prices also showed a late-month decline but averaged 6.8% higher in May than in April, while international rice quotations held steady.
The FAO Vegetable Oil Price Index gained 7.8% in May, mainly reflecting rising palm, soy and rapeseed oil quotations. Palm oil prices rose due to slow production in southeast Asian countries, while prospects of robust global demand, especially from the biodiesel sector, drove soyoil prices higher.
The FAO Sugar Price Index increased by 6.8% from April, due largely to harvest delays and concerns over reduced crop yields in Brazil even as large export volumes from India contributed to easing the price surge.
The FAO Meat Price Index increased by 2.2% from April due to a faster pace of import purchases by China, as well as rising internal demand for poultry and pig meats in the leading producing regions.
The FAO Dairy Price Index rose by 1.8% in the month, averaging 285 above its level of one year ago. The increase was led by solid import demand for skim and whole milk powders, while butter prices declined for the first time in almost a year on increased export supplies from New Zealand.