International Food Price Index Rises 2% Month-on-Month... Grains, Sugar, and Oils Increase

[Sejong=Asia Economy Reporter Kim Hyunjung] International food prices, centered on grains, sugar, and oils, have risen to levels comparable to the early stages of the COVID-19 outbreak in February to March.

According to the United Nations Food and Agriculture Organization (FAO1) on the 7th, the global food price index for August recorded 96.1 points, up 2.0% from the previous month (94.3 points). The food price index began rising from June and has reached levels seen during the early spread of COVID-19 (February to March, 99.4 to 95.1).

Meat and dairy prices remained similar to last month, but the price indices for grains, oils, and sugar all increased compared to both last month and the same month last year. First, grains recorded 98.7 points, up 1.9% from July (96.9 points) and 7.0% higher than the same month last year. The Ministry of Agriculture, Food and Rural Affairs explained that rice prices rose for the first time in three months due to the seasonally low international supply and increased demand from the African region. Wheat prices began rising from the end of August due to forecasts of reduced production in Europe and increased demand. Corn prices increased due to concerns over reduced U.S. production following crop damage in Iowa, and barley prices were influenced by increased imports of Argentine barley by China.

Oils recorded 98.7 points, up 5.9% from July (93.2 points) and 19.5% higher than the same month last year. This is the highest level since January 2020. Prices of palm oil and rapeseed oil rose due to continued supply shortages caused by production slowdowns in major producing countries, while soybean oil prices increased due to higher-than-expected demand from the U.S. biodiesel industry. Sunflower oil was significantly affected by import demand from China.

Sugar recorded 81.1 points, up 6.7% from July (76.0 points) and 6.4% higher than the same month last year. While India’s production is expected to increase, adverse weather conditions are forecasted to reduce production in Thailand, the world’s second-largest exporter, and the European Union. Additionally, rising consumption within China is driving continued growth in import demand, which are factors contributing to the price increase.

Meat prices recorded 93.2 points, a 0.1% increase from July (93.1 points), but fell 8.9% compared to the same month last year. Dairy prices remained unchanged at 102.0 points from July, showing only a 1.7% increase compared to last year.

Global grain production is projected to increase by 2.2% (58.6 million tons) to 2.7649 billion tons in 2020 and 2021 compared to 2019 and 2020.

This content was produced with the assistance of AI translation services.