World food prices are on the rise in November, keeping a 10-year high – FAO Reuters reported

ROME (Reuters) – World food prices rose for the fourth month in a row to maintain a 10-year high in November, boosted by high demand for wheat and dairy products, the UN food agency said on Thursday.

The Food and Agriculture Organization (FAO) Food Price Index, which tracks the world’s highest marketed international food prices, averaged 134.4 points last month compared to a revised 132.8 in October.

The October figure was previously given as 133.2.

The November reading index was the highest since June 2011. Year-on-year, the index rose 27.3% last month.

Agricultural commodity prices have risen sharply in the last year, driven by crop setbacks and strong demand.

The FAO cereal price index rose 3.1% in November compared to the previous month and was 23.2% higher than the previous year, with wheat prices reaching their highest level since May 2011.

The FAO said wheat prices supported concerns about seasonal rains in Australia and concerns about possible changes to export measures in Russia.

The milk price index rose the most for the month, 3.4% more than the previous month. “In the face of strong global import demand for butter and milk powder, buyers wanted to secure local supplies to prevent tightening markets,” the FAO said.

Overall sugar prices rose by 1.4% month-on-month and by almost 40% year-on-year. “The rise was mainly driven by high ethanol prices,” the FAO said.

The meat price index fell for the fourth consecutive month, falling 0.9% per month, and world vegetable oil prices fell 0.3% from October, but international palm oil prices remained steady, according to the FAO.

The FAO in Rome reduced its global cereal production forecast to 2.791 billion tonnes in 2021 from an estimated 2.793 billion tonnes a month ago, according to cereal supply and demand forecasts.

However, expected world cereal production would still be a record, according to the FAO.

“The month-on-month decline is mainly the result of a slightly smaller global forecast of coarse grains, reflecting a decline in barley and sorghum production forecasts,” the FAO said.

In 2021/22, world cereal use was projected to increase by 1.7% above 2020/21, reaching 2,810 billion tonnes. The FAO forecast for world cereal stocks at the end of the 2022 season was 822 million tonnes, 2.9 million tonnes more than in November, but 0.7% less than the initial level.