World food prices rose for the seventh consecutive month in December, led by dairy products and vegetable oils, according to the Food and Agriculture Organization of the United Nations.
The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, was at a three-year high over the whole of 2020. It still remains more than 25% below its historical 2011 peak.
“We do at this point see more factors pushing up global food prices,” said Abdolreza Abbassian, a senior economist at the FAO. “Food inflation is a reality. While people have lost income, they are as we speak going through a tremendously difficult hardship.”
Higher food prices are adding to global food insecurity and hunger. The economic slowdowns brought about by the pandemic and extreme weather events are also affecting food supply.
Export prices for wheat, maize, sorghum and rice all rose in December, partly due to concerns over growing conditions and crop prospects in North and South America as well as the Russian Federation. On an annual basis, rice export prices were 8.6 percent higher in 2020 than in 2019, while those for maize and wheat were 7.6 percent and 5.6 percent higher, respectively.
Vegetable oil prices rose on the back of ongoing tight supply in major palm oil producing countries and a sharp increase in export duties in Indonesia. Palm oil, which is used in about half of all supermarket goods, is near a 10-year high. Global prices for soy oil rose in part due to prolonged strikes in Argentina.
Meat prices in 2020 were 4.5% below that of 2019. A large surge in imports by China raised sugar prices 1.1% last year over 2019, helped also by increased demand for refined sugar from Indonesia’s food and beverage industry.