World food price index jumps in Nov to almost six-year high: FAO

[ROME] World food prices rose for a sixth month running in November, hitting almost a six year high with the index posting its biggest monthly increase since July 2012, the United Nations food agency said on Thursday.

The Food and Agriculture Organization's (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 105 points last month, versus a slightly revised 101 in October.

The October figure was previously given as 100.9.

The Rome-based FAO also said in a statement that worldwide cereal harvests remained on course to hit an annual record in 2020, even though it trimmed its forecast for a third month running.

Vegetable oil prices led the upward charge in the overall index, surging 14.5 per cent month-on-month, thanks largely to a rally in palm oil prices tied to a sharp fall in global inventories.

The cereal price index posted a more modest 2.5 per cent rise in November from the month before, some 19.9 per cent above its value a year earlier. Wheat export prices were pushed higher as a result of "reduced harvest prospects" in Argentina, while maize prices were lifted partly by lower crop forecasts in the United States and Ukraine. Rice prices held steady.

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Average sugar prices increased 3.3 per cent from October amid fears of a future shortfall in global production as poor weather hit crop prospects in the European Union, Russian and Thailand.

The dairy index climbed 0.9 per cent on the month to a near 18-month high, driven in part by firmer butter and cheese prices.

The meat index also pushed up 0.9 per cent, ending a run of nine consecutive monthly declines, but is down 13.7 per cent on the year.

FAO revised down its forecast for the 2020 cereal season for a third month running, cutting it to 2.74 billion tonnes from a previous 2.75 billion tonnes. However, this still represents a record high and is 1.3 per cent above last year's level.

"Looking further ahead, planting of the 2021 winter wheat crop in the northern hemisphere is underway, and sowings in several major producing countries are foreseen to increase driven by remunerative prices, although recent dry weather could curb planting expansions and hinder yields," FAO said.

The forecast for world cereal utilisation in 2020/21 was put at 2.74 billion tonnes, little changed from the previous estimate and up 1.9 per cent from the 2019/20 level.

The forecast for world cereal stocks by the close of seasons in 2021 was 866.4 million tonnes, down 9.6 million tonnes from the previous estimate posted last month.

"At this level, the global cereal stock-to-use ratio would decline from 31.8 per cent in 2019/20 to 30.7 per cent in 2020/21, a five-year low but still a relatively comfortable level," FAO said.

REUTERS