Tag: world food price index

World food prices fall to two-year low in May: UN Food Agency

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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World food prices up fourth straight month in Nov, stay at 10-year peak: FAO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Prices of food the world over increased for the fourth month running in November to remain at 10-year highs. The increase was fuelled by strong demand for wheat and dairy products, the Food and Agriculture Organization (FAO) of the United Nations said today.

FAO’s food price index, which tracks international prices of the most globally traded food commodities, averaged 134.4 points last month compared with a revised 132.8 points in October.

The October figure was previously given as 133.2.

The November reading was the highest for the index since June 2011. On a year-on-year basis, the index was up 27.3% last month.

Agricultural commodity prices have risen steeply in the past year, driven by harvest setbacks and strong demand.

The FAO’s cereal price index rose 3.1% in November from the previous month and was 23.2% higher than its year-ago level, with wheat prices hitting their highest level since May 2011.

FAO said wheat prices were supported by concerns about unseasonable rains in Australia and uncertainty over potential changes to export measures in Russia.

The dairy price index posted the largest monthly rise, up 3.4% from the previous month. “Strong global import demand persisted for butter and milk powders as buyers sought to secure spot supplies in anticipating of tightening markets,” FAO said.

Global sugar prices rose 1.4% on the month and was up nearly 40% year-on-year. “The increase was primarily driven by higher ethanol prices,” FAO said.

The meat price index posted its fourth consecutive monthly decline, shedding 0.9% on the month, while world vegetable oil prices fell 0.3% on October levels, but international palm oil prices remained firm, FAO said.

The Rome-based FAO cut its projection of global cereal production in 2021 to 2.791 billion tonnes from 2.793 billion estimated a month ago, according to its cereal supply and demand outlook.

However, the expected world cereal output would still represent a record, FAO said.

“The month-to-month downgrade is primarily the result of an anticipated marginally smaller global coarse grains outturn, reflecting reduced forecasts for barley and sorghum production,” FAO said.

World cereal utilization in 2021-22 was forecast to rise by 1.7% above the 2020-21 level, hitting 2.810 billion tonnes. FAO’s forecast for world cereal stocks by the close of seasons in 2022 stood at 822 million tonnes, up 2.9 million tonnes since November but still down 0.7% from opening levels.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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How global workers’ shortage, erratic weather and supply chain disruptions are driving up food prices

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The impact of the COVID-19 pandemic disruptions and the spread of the Delta variant is now reflecting in food prices. Shortage of workers, extreme weather events, breakdown of supply chains, and rising inflation are all contributing to soaring prices of food.

World food prices were on a decline over the last two months after increasing for nearly 12 months straight. However, the UN Food and Agriculture Organization (FAO) on September 2 said the prices began picking up again in August.

The FAO food price index, which tracks the prices of the most traded food commodities in the world, was 123.5 points in July as against 127.4 points in August. Prices of food in August were 32.9 percent higher than the previous year.

While heatwaves and floods have affected crops across the world, from the US to Italy and even Brazil, labour shortages are proving to be another immediate concern. The lockdowns have severely affected well-established supply chains in many countries.

Malaysia’s palm oil production fell by 30 percent due to a shortage of workers, 20 percent of tomatoes in Southern Italy were ruined as they were not harvested on time and also because of poor transportation, Bloomberg reported. Meanwhile, shrimp production in South Vietnam fell by over 60 percent, it added. Several other food items across different regions witnessed circumstances, with countless tonnes of production lost.

The labour shortages that these nations are facing are not new but only compounded by the pandemic restrictions. Agricultural work is seasonal, back-breaking, pays little, and has only a few benefits to offer. As a result, most of the positions are often filled by migrants, many of whom come to countries like the UK and US illegally.

As economies develop, individuals try to learn skills and land high-paying jobs in the cities. Jobs like farmhands find fewer takers. Therefore, these vacancies are usually picked up by migrants.

It is estimated that 73 percent of the workforce in US agriculture comprises immigrants. Of the entire agricultural workforce in the country, nearly 50 percent are undocumented migrants.

However, recent anti-migrant regulations and rhetoric across the Western hemisphere made the inflow of migrants smaller, and the lockdowns restricting movement from one country to the other almost completely halted the flow of workers. When shutdowns were lifted, many workers made their way back home as they were stuck without support or pay on foreign soil.

Now, nations like the UK, US, Australia, Italy and others that traditionally rely on immigrants in their agricultural sector are starting to feel the pressure.

Also Read: How climate change is altering wine production across the world

Wages in the sector aren’t high enough to compensate for the effort put in. Therefore, the sector is gradually increasing the wages being offered to workers. A similar effect is also being witnessed across other traditionally low paying jobs in restaurants, hospitality and other associated sectors.

As margins often remain thin, the increased costs are all but expected to be passed on to the consumer. Inflationary pressures, transitionary or not, are compounding the price pressure.
But for countries like India and China, where there is an abundance of labour, significant price pressures aren’t expected outside of inflationary rise apart from outlier regions.

However, domestic migrants, who make up a significant portion of the agricultural workforce in India, have suffered catastrophically since March 2020 due to the lack of support and dwindling wages. There is also no comprehensive data to show how badly they were affected.

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FAO Food Price Index rises in August, here’s why

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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FAO Food Price Index has seen a rebound in the month of August. June and July witnessed a decline but August has come back in a big way. The August index stands at around 127.4 on a month-on-month (MoM) basis, this is more than 3 percent of gain, but on a year-on-year (YoY) basis, we are still 33 percent on the higher side when it comes to food prices.

Within the index also, there are some components which have actually seen a huge price rise.

Sugar, for example, has seen the maximum increase of 9.6 percent on a month-on-month basis. There are Brazil crop concerns on account of drought and now frost, and then the global markets are looking at around 3 million tonnes of deficit in this year, and that clearly has been supportive for sugar.

The other component is the Vegetable Oil Price Index, which also has gained 6.7 percent on a month-on-month basis. Remember, the international palm oil prices were hitting an all-time high in the month of August. The other components in Vegetable Oil Price Index like sunflower, rapeseed prices have been surging as well.

The Cereal Price Index also gained by 3.4 percent on a month-on-month basis. Within this index, it is the world wheat prices which gained by 8.8 percent. The world wheat inventories are at the lowest in eight years in the US and at 40-year lows in Canada, and that is the reason why there has been a surge in wheat prices and the Cereal Price Index has been rising because of that as well.

Components like dairy and meat witnessed a marginal decline.

The FAO also has come out with the global production levels of many of these food grains for 2021. So when it comes to cereal, there is nearly a 0.7 percent increase. Wheat saw an increase of 0.7 percent as well.

The coarse grains are looking at a higher production this time around at 1.3 percent of an increase and rice is the second largest on record, with regard to the global inventories.

For rice, we are looking at nearly a percentage point of increase in production. The consumption, clearly, has been much higher because of the kind of global restrictions that are there. Rice has been a major commodity that the world has been holding.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

COVID impact: Global Food Price Index soars to 10-year peak

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The COVID-19 pandemic led to food security related concerns globally, with several regions, including the Middle-East, rushing for cover. Now the Food and Agriculture Organisation (FAO) of the United Nations has reported a surge in international prices of vegetable oils, sugar and cereals, reported ANI.

This surge led to the increase in the index, which tracks monthly changes in the international prices of commonly-traded food commodities.

As per a report released on June 3, the FAO Food Price Index averaged 127.1 points in May, 4.8 percent higher than in April and 39.7 per cent higher than in May 2020.

This surge takes the index to its highest value since September 2011 and only 7.6 percent below its all-time peak in nominal terms.

The FAO Vegetable Oil Price Index gained 7.8 percent in May, mainly reflecting rising palm, soy and rapeseed oil quotations. Palm oil prices and soy oil prices rose due to slow production and robust global demand related dynamics.

International wheat prices averaged 6.8 percent higher in May than in April, while international rice quotations held steady.

The FAO Sugar Price Index increased by 6.8 percent from April largely due to harvest delays and concerns over reduced crop yields in Brazil, the world’s largest sugar exporter, even as large export volumes from India contributed to easing the price surge.

The FAO Cereal Price Index increased six percent from April, led by international maize prices, which averaged 89.9 percent above their year-earlier value. However, maize prices started to retreat at the end of May on improved production prospects in the United States.

A new Cereal Supply and Demand Brief, also released on June 3, offered FAO’s first forecast for world cereal production in 2021, now pegged at nearly 2.82 billion tonnes, a new record and a 1.9 percent increase from 2020, led by a foreseen 3.7 percent annual growth in maize output.

The FAO Meat Price Index increased by 2.2 percent from April. The FAO Dairy Price Index rose by 1.8 percent in the month, averaging 28 percent above its level of one year ago.

The surge has raised concerns that the inflation, initially stoked by the pandemic, was accelerating. Experts said the higher inflation will hit poorer countries reliant on imports for staple goods.

Economists and analysts also warned that the return of eating out as lockdowns lifted around the world would add to price pressures. The cost of labour, transport and shipping is expected to push prices higher in the coming months.

The rise in raw material prices has been so steep that MNC giants such as Nestlé and Coca-Cola have said they would pass on any increases to consumers.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

World food price index rises in March for 10th month running: FAO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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World food prices rose for a 10th consecutive month in March, hitting their highest level since June 2014, led by jumps in vegetable oils, meat and dairy indices, the United Nations food agency said on Thursday. The Food and Agriculture Organization’s food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 118.5 points last month versus a slightly revised 116.1 in February.

The February figure was previously given as 116.0.

The Rome-based FAO also said in a statement that worldwide cereal harvests remained on course to hit an annual record in 2020, adding that early indications pointed to a further increase in production this year.

FAO’s cereal price index fell 1.7 percent month on month in March, ending eight months of consecutive gains, but still 26.5 percent higher than the same period last month.

Among major cereals, wheat export prices dropped the most, declining 2.4 percent on the month, reflecting good supplies and encouraging production prospects for the 2021 crops, FAO said.

FAO’s vegetable oil price index surged 8.0 percent on the month to reach its highest level since June 2011, lifted by higher prices for palm, soy, rape and sunflower oils.

Dairy prices rose for a 10th month running, registering a 3.9 percent increase. FAO said one of the drivers in the sector was milk powder, which was boosted by a surge in imports in Asia, especially China, due to concerns over short-term supplies.

The meat index climbed 2.3 percent, but unlike all the other indices, it was still slightly down on a year-on-year basis. FAO said poultry and pig meat quotations increased, underpinned by a fast pace of imports by Asian countries, mainly China.

Sugar prices dropped 4.0 percent month on month, but was still up 30 percent on the year. March’s decline was fuelled by prospects of large exports from India, FAO said. FAO raised its forecast for the 2020 cereal season to 2.765 billion tonnes from a previous estimate of 2.761 billion, pointing to a 2.0 percent increase year on year.

Looking ahead, FAO said it expected global cereal production to increase for a third consecutive year in 2021.

Global wheat production was seen hitting a new high of 785 million tonnes this year, up 1.4 percent from 2020 levels, driven by an anticipated sharp rebound across most of Europe and expectations of a record harvest in India, FAO said.

Above-average outputs were also expected for maize, with a record harvest forecast for Brazil and a multi-year high predicted for South Africa.
For the current 2020/21 marketing season, global cereal utilisation was forecast at 2.777 billion tonnes, 2.4 percent up on the previous year, driven largely by higher estimates of feed use of wheat and barley in China, where the livestock sector is recovering from African swine fever.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow