World Food Prices Reach 18-Month High

PARIS (Reuters) – World food prices rose in October to an 18-month high, led by increases in vegetable oils, according to data released by the United Nations on Friday.

The U.N. Food and Agriculture Organization (FAO) compiled a price index to track globally traded food commodities, which increased to 127.4 points last month, up 2% from a revised 124.9 points in September.

This index reflects a 5.5% increase from a year ago, marking its highest level since April 2023, yet remaining 20.5% below the record set in March 2022 after Russia's invasion of Ukraine.

All categories of food prices experienced a rise except for meat. Notably, vegetable oils surged by more than 7%, driven by concerns regarding palm oil production.

The overall index continued its upward trend from September, when it reached its highest since July 2023, influenced by soaring sugar prices. Ongoing worries about the 2024/25 production outlook in Brazil contributed to a modest 2.6% increase in sugar prices for October.

Cereal prices increased by 0.8% from September, spurred by rising wheat prices due to unfavorable northern hemisphere planting conditions and the introduction of an unofficial Russian export price floor, while maize also saw price gains.

Dairy prices rose nearly 2%, fueled by strong demand for cheese and butter amidst limited supply.

Conversely, overall meat prices dipped by 0.3%, with pork witnessing the most significant drop, while poultry also fell, in contrast to beef, which rose due to heightened international demand.

Additionally, the FAO released a separate report revising its global cereal production forecast for 2024, decreasing it from 2.853 billion metric tons to 2.848 billion metric tons. This change indicates a 0.4% drop from the previous year but still represents the second-largest production level on record.