- November marked a further increase in the value of the FAO Food Price Index
The FAO Food Price Index (FFPI) averaged 134.4 points in November 2021, up 1.6 points (1.2 percent) from October and 28.8 points (27.3 percent) from November 2020.
The latest increase marked the fourth consecutive monthly rise in the value of the FFPI, putting the index at its highest level since June 2011.
Among the sub-indices, in November those for cereals and dairy rose most significantly, followed by sugar, while those for meat and vegetable oils were down, albeit slightly, from the previous month.
The FAO Cereal Price Index averaged 141.5 points in November, up 4.3 points (3.1 percent) from October and 26.6 points (23.2 percent) above its level one year ago.
Strong demand amid tight supplies, especially of higher quality wheat among major exporters, continued to lift wheat prices for a fifth consecutive month, to their highest level since May 2011.
Potentially reduced quality of the ongoing harvest in Australia, following untimely rains, and uncertainty regarding potential changes to export measures in the Russian Federation also provided support.
Among coarse grains, international barley prices continued to rise on tight supplies and spillovers from wheat markets. Maize export prices rose slightly in November, receiving support from strong pace in sales from Argentina, Brazil and Ukraine, while seasonal supply pressure capped export prices from the United States of America.
By contrast, international rice prices remained broadly steady in November, reined in by harvest progress in various Asian suppliers and scattered import demand.
The FAO Vegetable Oil Price Index averaged 184.6 points in November, down marginally (by 0.3 points or 0.2 percent) from the record high registered in the previous month.
The slight decrease reflected somewhat lower values for soy and rapeseed oils, while quotations for palm oil remained virtually unchanged.
International palm oil prices maintained their firmness in November, with the downward pressure linked to rising concerns over the impact of a resurgence in COVID-19 cases largely offset by the support stemming from the anticipation of production slowdowns in major producing countries.
As for soy and rapeseed oils, world prices retreated moderately, broadly softened by demand rationing. Meanwhile, lower crude oil values also weighed on vegetable oil prices.
The FAO Dairy Price Index averaged 125.5 points in November, up 4.1 points (3.4 percent) from October and 20.2 points (19.1 percent) above its level in the same month last year.
In November, international price quotations for butter and milk powders rose sharply for the third consecutive month, driven by tight global export availabilities and depleted stocks, as deliveries declined in several large milk-producing countries in Western Europe, coinciding with lower-than-anticipated output in Oceania.
Strong global import demand persisted amidst buyers’ efforts to secure spot supplies in anticipation of tightening markets, adding further upward pressure on prices, notwithstanding market uncertainty over near-term demand caused by increasing COVID-19-related social restrictions.
Cheese quotations rose slightly, reflecting increased demand and shipping delays that hindered sales from global suppliers.
The FAO Meat Price Index* averaged 109.8 points in November, down 1.0 point (0.9 percent) from October, falling for the fourth consecutive month, though still 16.5 points (17.6 percent) above its value in the corresponding month a year ago.
In November, international quotations for pig meat fell for the fifth consecutive month, underpinned by reduced purchases by China, especially from the European Union.
Ovine price quotations also fell steeply on increased exportable supplies, mainly from Australia.
Meanwhile, international bovine meat prices remained stable, as decreased quotations for Brazil’s meat were offset by higher Australian export values, reflecting low cattle sales for slaughter amid high herd-rebuilding demand.
Poultry meat prices were also largely stable, as global supplies seemed adequate to meet demand, despite supply-side constraints, especially shipping container shortages and avian flu in Europe and Asia.
The FAO Sugar Price Index averaged 120.7 points in November, up by 1.6 points (1.4 percent) from October, reversing most of the previous month’s decline and reaching levels nearly 40 percent above those registered in the same month last year.
The November rebound in international sugar price quotations was mainly prompted by higher ethanol prices, which encouraged a greater use of sugarcane for ethanol production in Brazil, the world’s largest sugar exporter.
Further support to world sugar prices was provided by stronger global import demand, prompted by lower freight costs.
Overall, however, the upward pressure on world sugar prices was limited by large shipments from India and the positive outlook for sugar exports by Thailand.
* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could, in turn, influence the value of the FAO Food Price Index.