Global food prices continue to surge, hitting 7-year highs, UN says

A new report by the Food and Agriculture Organization (FAO) of the United Nations shows that global food commodity prices rose in March, marking their tenth consecutive monthly increase.

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 118.5 points in March, 2.1% higher than in February and reaching its highest level since June 2014. 

According to the FAO, the March increase was led by the vegetable oil price index, which rose 8% from the previous month to hit a nearly 10-year high, “with soy oil prices rising sharply due in part to the prospects of firm demand from the biodiesel sector.” 

The dairy price index increased 3.9% from February, with “butter prices buoyed by somewhat tight supplies in Europe associated with increased demand in anticipation of a food-service sector recovery.” Milk powder prices also rose, supported by a surge in imports in Asia, particularly China, due to declining production in Oceania and scarce shipping container availability in Europe and North America.

The meat price index showed a 2.3% rise from February, according to the report. The agriculture organization pointed out that imports by China and a surge in internal sales in Europe ahead of the Easter holiday celebration underpinned increasing poultry and pig meat quotations. 

By contrast, the cereal price index dropped by 1.8%, but it is still 26.5% higher than in March 2020, the report said, adding: “Wheat export prices declined the most, reflecting generally good supplies and favourable production prospects for 2021 crops. Maize and rice prices also declined, while those for sorghum rose.”

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