High Global Food Prices, With Signs of Improvement in Demand

  • International
  • 3 July 2020

Global food prices rose during last June, for the first time since the beginning of 2020, with signs of improvement in demand, after periods of deflation caused by the closure of most of the world's economies, due to corona pandemic.

According to the Food and Agriculture Organization of the United Nations (FAO), the price indices for vegetable oils, sugar and dairy products have improved; While grain and meat prices remained under downward pressure.

The average food price index adopted by the Food and Agriculture Organization, which measures the international prices of the most traded food commodities (sugar, meat, dairy, oils, grains), reached 93.2 points in June, an increase of 2.4 percent in May. The FAO vegetable oil price index rose 11.3 percent in June, after falling for four consecutive months.

The recovery mainly reflects a sharp rise in palm oil prices, due to the recovery in global import demand, after the easing of COVID-19-related closures in a number of countries. The sugar price index increased by 10.6 percent in June compared to the previous month, driven by the surge in crude oil prices, which encouraged Brazilian sugar factories to use more sugar cane supplies to produce ethanol instead of sugar.

Also, the dairy price index increased by 4 percent, its first increase after four months of consecutive declines; Supporting renewed demand for immediate imports, especially from the Middle East and East Asia. In contrast, the cereal price index fell by 0.6 percent, due to new crops in the northern hemisphere and improved production prospects in a number of major exporting countries. The meat price index fell 0.6 percent, driven by lower prices for beef and poultry, and an increase in the availability of exports in the main producing regions.

Source (Anatolia Agency, Edited)


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