Rising Vegetable Oil Prices Contribute To Increased Food Price Index In November 2023

In November, global food commodity prices reached their highest point since April 2023, according to the Food and Agriculture Organisation (FAO) of the United Nations. The FAO Food Price Index, which monitors monthly changes in international food commodity prices, rose by 0.5 percent from October. This increase was primarily due to a surge in vegetable oil prices.

The FAO Vegetable Oil Price Index saw a significant rise of 7.5 percent in November compared to October. This marked its second substantial increase in two months and was 32 percent higher than the same time last year. Global palm oil prices continued to climb due to concerns about lower-than-expected production caused by excessive rainfall in Southeast Asia.

Meanwhile, the FAO Dairy Price Index experienced a modest increase of 0.6 percent in November. This was driven by heightened global demand for whole milk powder. Butter prices reached record levels due to strong demand and low inventories in Western Europe, while limited export availability pushed cheese prices higher.

The FAO Cereal Price Index fell by 2.7 percent in November, which is 8.0 percent lower than the same period last year. Wheat prices dropped because of weak global demand and strong harvests in the Southern Hemisphere. Maize prices remained stable as robust domestic demand in Brazil and Mexico balanced favourable weather conditions in South America and reduced demand for Ukrainian supplies.

Sugar prices decreased by 2.4 percent, influenced by harvest activities in India and Thailand and improved sugarcane crop prospects in Brazil following recent rains.

Meat Prices Show Mixed Trends

The Meat Price Index declined by 0.8 percent, mainly due to lower pig meat prices in the EU amid ample supply and weak demand. Ovine and poultry meat prices saw slight declines, while bovine meat prices remained steady, balancing higher Brazilian quotations with lower Australian ones.

Overall, while some food commodity prices rose significantly, others saw declines or remained stable due to various global factors affecting supply and demand dynamics.

With inputs from WAM