Global food prices soared in October, reaching their highest level in 18 months, with the United Nations’ Food and Agriculture Organization (FAO) citing vegetable oil as a key driver.
The FAO Food Price Index, which tracks monthly changes in prices of globally traded food commodities, averaged 127.4 points, up 2% from September and 5% from last year’s level. The index figure has shown a steady rise in recent months although it remains 20.5% below its March 2022 peak.
Vegetable oil prices jumped 7% in October, marking a two-year high. FAO attributed the spike to rising demand and production concerns, with significant increases in palm, soy, sunflower, and rapeseed oil prices.
Meanwhile, cereal prices edged up by 0.9%, largely due to higher wheat and maize prices. Weather issues affected wheat production in key regions of the northern hemisphere, while maize prices faced pressures from strong demand and transport difficulties in Brazil. Maize shipments from Ukraine have also been heavily impacted by the collapse of the Black Sea Grain Initiative.
In contrast, rice prices declined by 5%, mainly due to India’s recent removal of export restrictions on non-broken rice, which led to expectations of increased competition among exporters.
FAO’s latest Cereal Supply and Demand Brief forecasts a slight dip in global cereal production for 2024, down 0.4% from last year to 2.8 billion tons. This would mark the second-largest global output on record.
Wheat production is expected to rise, supported by expanded planting and favorable weather in Asia, offsetting declines in Europe. However, global maize production may fall due to challenging weather conditions.
Rice production, on the other hand, could set a new record at 538.9 million tons, boosted by high planting rates.
FAO projects global cereal utilization to grow by 0.5% to 2.8 billion tons, driven by increased food consumption of rice and wheat. Global cereal stocks should expand by 0.6%, totaling 889 million tonnes, with rice inventories largely responsible for this growth. However, FAO warns that international cereal trade may shrink by 3.9% from last year’s levels, with reduced wheat and maize exports offsetting an increase in rice trade.
FAO’s Crop Prospects and Food Situation report highlights urgent food assistance needs in 45 countries worldwide, including 33 in Africa, nine in Asia, two in Latin America and the Caribbean, and one in Europe.
Conflict continues to drive severe food insecurity, with areas like Gaza, Haiti, Mali, and Sudan experiencing critical food shortages.
In Africa, while cereal output among Low-Income Food Deficit Countries (LIFDCs) is expected to remain near average, southern African nations anticipate lower harvests, partially offset by gains in other regions.