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COVID-19: Industry Updates

Global food prices rise for 5th consecutive month

Food commodity prices
Global food prices rose for the fifth consecutive month in October, led by cereals, sugar, dairy and vegetable oils, according to the latest data from the UN’s Food Agriculture Organization (FAO).

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 100.9 points in October 2020, up 3 points (3.1%) form September 2020 and 5.7 points (6%) higher than its value one year ago.

The Cereal Price Index averaged 111.6 points in October, up 7.5 points (7.2%) from September and as much as 15.8 points (16.5%) above its value in October 2019. The October rise marked the fourth month of consecutive increase. The surge was mainly driven by wheat prices amid shrinking export availabilities, poor growing conditions in Argentina and continued dry weather affecting winter wheat sowings in Europe, North America and the Black Sea region.  Maize, feed barley and sorghum prices also remained under upward pressure in October, while those of rice subsided.

The Vegetable Oil Price Index averaged 106.4 points in October, up 1.8 points (1.8%) month-on-month and posting a nine-month high. The continued strength of the index largely reflects firmer palm and soy oil prices, while those of rapeseed oil declined moderately amid increased uncertainty regarding demand in the European Union (EU) following the recent deterioration of the COVID-19 situation across the region.

The Dairy Price Index averaged 104.4 points in October, up 2.2 points (2.2%) from September, marking the fifth consecutive monthly increase and lifting the index 3.6 points (3.5%) above its value in the corresponding month last year. In October, price quotations for all dairy products represented in the index rose, with cheese rising the most, followed by skim milk powder, whole milk powder and butter. Price increases in October reflected market tightening for near-term deliveries, underpinned by robust import demand from Asian and Middle Eastern markets.

The Sugar Price Index averaged 85.0 points in October, up 6 points (7.6%) from September and 7.2 points (9.3%) from last year. This increase reflected mostly the prospects of a lower sugar output in both Brazil and India, the two largest sugar producing countries, due to below average rainfalls. Sugar prices were also supported by developments in Thailand, where sugar output is seen lower by almost 5% from last year because of protracted dry conditions.

The Meat Price Index averaged 90.7 points in October, down slightly (0.5 points or 0.5%) from September, marking the ninth monthly decline since January, and standing 10.9 points (10.7%) lower than its value a year ago. Pig meat prices dropped, reflecting in part continued influence of the import restrictions imposed by China on Germany. Bovine and poultry meat prices also fell, while prices of ovine meat rose on steady internal demand and low export supplies.

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