Higher prices for staples such as vegetable oils, wheat, cheese and sugar have pushed global costs to their highest level in 18 months, signalling more pain ahead for shoppers.
The UN Food and Agriculture Organization’s (FAO) food price index rose to 127.4 in October — the highest level since April 2023. The figure, published on Friday (8), was up 5.5 per cent from October last year. Prices for food commodities have risen steadily since the start of the year.
Although food costs remain well below levels reached in March 2022, consumers are already having to pay more for groceries as increases are passed on from food manufacturers to shoppers. Food price pressures across the G7 major advanced economies ticked up for the first time in two years in September, complicating rate-setters’ attempts to cut rates to support growth and jobs.
The FAO Vegetable Oil Price Index spiked by 7.3 percent in October, hitting a two-year high as a result of rising quotations for palm, soy, sunflower and rapeseed oil, driven mainly by concerns about production.
The FAO Cereal Price Index increased by 0.9 percent in October, led by rising wheat and maize export prices. Global wheat prices were affected by unfavorable weather conditions in major northern hemisphere exporters as well as the re-introduction of an unofficial price floor in the Russian Federation and rising tensions in the Black Sea region.
The FAO Sugar Price Index increased by 2.6 percent amid persisting concerns over the 2024/25 production outlook in Brazil following extended dry weather conditions. Rising international crude oil prices also contributed to the increase in sugar quotations by shifting more sugarcane toward ethanol production, while the weakening of the Brazilian real against the United States dollar limited the increase.
The FAO Dairy Price Index rose by 1.9 percent in October, averaging 21.4 percent above its level the same time last year. The increase was primarily driven by higher international cheese and butter prices, while quotations for milk powders declined.
Bucking the general upward trend, the FAO Meat Price Index dropped by 0.3 percent from September, mainly due to lower pig meat prices resulting from increased slaughter rates in Western Europe amid weak domestic and international demand. World poultry prices fell slightly in October, while those of ovine meat remained stable. By contrast, bovine meat prices increased moderately, underpinned by stronger international purchases.
