Global food prices hit 26-month high in November

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ROME: World food prices rose strongly in November, lifted by big jumps in prices of meat and vegetable oils, despite slightly lower cereals prices, the United Nations food agency said on Thursday.

The Food and Agriculture Organization (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar hit a 26-month high in November, averaging 177.2 points, up 2.7pc on the previous month and up 9.5pc year-on-year.

FAO also predicted that cereal production would reach an all-time high of 2.714 billion tonnes in 2019, up 0.4pc from its last forecast.

The cereal price index fell 1.2pc to 162.4 points, with large export supplies and strong competition among world producers weighing on wheat prices. Rice prices fell to six-month lows as new crop arrivals added pressure.

The vegetable oil price index rose 10.4pc to 150.6 points, reaching its highest point since May 2018, led by firmer palm oil prices, which strengthened on robust import demand, increased biodiesel use and concerns over possible supply shortages.

The meat price index registered its largest monthly increase since May 2009, rising 4.6pc from October to 190.5 points, with beef and sheep meat rising most strongly, lifted by demand from China and year-end holiday demand.

The sugar price index averaged 181.6 points, up 1.8pc from October, led by expectations of higher demand.

The FAO Dairy Price Index averaged 192.6 points, only marginally up from October, after two months of declines.

The agency raised its forecast for global cereal production in 2019 by 0.4pc, estimating world cereal output at 2.714 billion tonnes, compared with 2018 levels.

Wheat output was seen up 4.8pc at 766.4 million tonnes.

Global rice production was seen at 515 million tonnes, up 1.6 million tonnes from the previous forecast, implying a 0.5pc fall from the 2018 all-time high, the agency said.

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