The food index of the Food and Agriculture Organization of the United Nations remains at its highest level in more than ten years, with a score of 134,4 points. In November, the index rose by 1,2%. The dairy market in particular contributes to a higher price index. This while meat products became slightly cheaper last month.
The Food and Agriculture Organization (FAO) food price index rose 1,2% last month to 134,4 points. It is the highest level since June 2011. If we look at the same month a year earlier, today 27,3% more is paid for food. The food price index is divided into the different sectors, with the FAO Dairy Price Index showing the strongest increase last month. Compared to October, a plus of 3,4% was visible. This increase was driven by strong global demand for butter and milk powder. Buyers want to build up inventories as the market for those products tightens.
The price index for the grain market follows closely behind, with an increase of 3,1% over the past month. The average price for grains is 23,2% higher than last year in the same period. The fact that wheat prices in November reached their highest level since May 2011 largely explains the increase. Strong demand in combination with a tight stock is the reason for this again. Cereal prices are also supported by concerns about early rainfall in Australia and possible changes in Russia's export controls.
Sugar also recorded a much higher price level than a year earlier. The United Nations Food and Agriculture Organization's sugar price index is 40% higher. Compared to the month of October, a plus of 1,4% is visible. This is due to the high ethanol prices. The prospects are positive, because a larger supply from India is expected. At the same time, there are positive expectations for Thai sugar exports.
Meat prices down for fourth month
An opposite trend as above was visible in the FAO Meat Price Index. It fell for the fourth month in a row in November: -0,9% compared to October. Compared to the same period one year earlier, meat prices are now on average 17,6% higher. Pork accounts for the largest share of the decline in the FAO Meat Price Index. Which is because China imports less pork from the European Union. Beef and poultry meat remained stable last month.
The Food and Agriculture Organization's vegetable oil price index fell 0,3% last month. A record level was reached in October. The decrease is the result of lower prices for soybean oil and rapeseed oil. The downward trend in Brent oil also plays a role. The high prices for palm oil remain, but cannot sustain the price index alone.
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