Global Food Prices Hit 19-Month High in November, UN Reports

World food prices surged to their highest levels since April 2023, driven largely by a sharp increase in vegetable oil prices, according to data from the United Nations Food and Agriculture Organization (FAO).

Key Findings

• The FAO Food Price Index, which monitors globally traded food commodities, rose to 127.5 points in November, up from a revised 126.9 points in October.
• This marks a 5.7% increase compared to November 2023 and the largest monthly gain in 19 months.

Vegetable Oil Leads the Surge

• The Vegetable Oil Price Index soared 7.5% month-on-month and is now 32% higher than a year ago.
• The rise is attributed to:
  • Concerns over lower-than-expected palm oil output caused by excessive rainfall in Southeast Asia.
  • Increased global demand for soyoil.
  • Higher rapeseed and sunflower oil prices.

Declines in Other Food Commodities

• Cereal Prices: Fell 2.7% from October, with declines in wheat and rice prices.
• Sugar Prices: Dropped 2.4% as India and Thailand ramped up production and concerns eased over Brazil’s crop outlook.

Cereal Production Forecast

• The FAO trimmed its forecast for 2024 global cereal production to 2.841 billion metric tons, slightly lower than the previous estimate but still the second-largest output on record.
• Cereal utilization is projected to increase 0.6% to 2.859 billion tons in 2024/25, reflecting growing consumption.

Despite the adjustments, the global cereal stocks-to-use ratio is expected to remain at a “comfortable level” of 30.1% by the end of the 2025 season, down from 30.8% previously.

Broader Context

The surge in food prices highlights ongoing challenges in global food security, with climate events and demand fluctuations continuing to impact key commodities. However, robust cereal output and utilization trends provide some reassurance of a stable supply in the near term.