World food prices have updated the maximum since 2011

In October, world food prices increased by 3% compared to September and reached the highest level since July 2011, the Food and Agriculture Organization of the United Nations (FAO) said. In October, the average value of the FAO Food Price Index, which monitors fluctuations in world food prices on a monthly basis, was 133.2 points. The index has been growing for three consecutive months. In June, the first decline in 12 months was noted, which continued in July, but then prices began to rise again.  

Most of all - by 9.6% - in October, the value of the vegetable oil price index increased, it reached the highest level for the entire period of observation, FAO notes. Such dynamics was due to the increase in quotations of palm, soybean, sunflower and rapeseed oils. At the same time, palm oil has risen in price for four months in a row amid fears of low production in Malaysia due to a shortage of migrant workers, the organization said.

The grain price index rose by 3.2% in October. As a result of deteriorating crop prospects in major exporting countries, including Canada, Russia and the United States , and reduced supply of wheat in global markets, agricultural prices rose by 5%. Also, FAO recorded an increase in world prices for other main types of cereals.

The value of the price index for dairy products increased by 2.6%. FAO attributed this to increased global demand for butter, skimmed milk powder and whole milk and the desire of buyers to increase stocks. At the same time, cheese prices were generally stable, as the supply of major producing countries is sufficient to meet global import demand.

Meanwhile, the meat price index fell 0.7%. Meat in the world has been getting cheaper for the third month already: world quotations of pork fell due to a reduction in purchases from China , and beef - as a result of a sharp decline in quotations of Brazilian meat. At the same time, prices for poultry and mutton increased on the back of strong demand and an expected slowdown in output growth.

The sugar price index decreased for the first time in six months - by 1.8%. FAO attributed this to limited import demand and a projected increase in exports from India and Thailand, as well as the depreciation of the Brazilian real against the US dollar. In early November, Bloomberg reported that world sugar prices set a new four-year record due to rising demand for alcohol. The price peaked on the background of the energy crisis and its pressure on the market.

Central Bank: low harvest will negatively affect prices in 2022 

FAO Senior Economist Abdolreza Abbassian told TASS in October that the combination of rising energy and food prices is a cause for concern and could lead to problems in the long run. “Rising energy prices are driving up the cost of food production. Fertilizer production requires gas, and its price reaches historical highs. And farmers have to choose, so the question arises: will they be able to sow the same amount this year. Accordingly, the question is whether supplies will satisfy demand, whether an increase in fuel prices will lead to a decrease in crops, ”Abbassian noted. He also added that energy prices affect the food market in terms of higher transportation costs.