The FAO’s Food Price Index was up for a third consecutive month in October, rising 3% from September and 31.3% from October 2020. That increase put the price index at a level not seen since July 2011. The increase was mainly due to high global oil and cereal prices.
Cereal prices were up 3.2% from September, making them 22.4% higher than October 2020. All cereals experienced an increase in October, chief among them wheat. World wheat was up for the fourth consecutive month reaching its highest level since November 2012. Reduced harvests in Canada, Russia, and U.S. along with a reduction of high-quality wheat supplies helped drive the price up further. Rice prices rose but were limited by the onset of harvests from Asia. Maize prices increased due to gains in energy markets, but increase was capped by higher seasonal supplies and reduced port slowdowns in the U.S. Barley increased most among coarse grains because of high demand and low supply.
Oil prices were up 9.6% from September, finishing at a record high. All oils saw an increase. Palm oil was up for the fourth consecutive month, again due to Malaysian labor issues. Rapeseed oil continued to rise from a lasting supply-demand tightness.
Dairy prices were up 2.2% from September and up 15.5% from October 2020, though cheese prices stayed stable. Butter, skim milk powder, and whole milk powder experienced a sharp rise for the second consecutive month due to high import demand, shorter supply in Europe, and a late start in Oceania production.
Meat quotations were down .7% from September marking the third month of declines, though still up 22.1% from October 2020. Pork was down due to fewer purchases by China. Beef prices fell, mainly over the uncertainty of mad-cow disease in Brazil. Poultry quotations rose due to high global demand and lower supply. Production was hurt by high feed costs and avian flu outbreaks, mainly in Europe.
Sugar prices dipped 1.8% from September, which is the first decline after six straight increases. However, quotations were still 40% higher from October 2020 due to concerns over Brazilian output reduction. The monthly decline was due to the hope of large export volumes from India and Thailand amid less demand. A weaker Brazilian currency also helped with the decline.
The next FAO Food Price Index report is due out December 2nd. Come back then to find a full breakdown of that report to see how November faired. Leave a comment letting me know if these numbers match your experience buying food.