Global food prices the highest since 2014

Wednesday, 13 January 2021

By Bethan Wilkins

The latest figures from the UN FAO show that prices have been rising for most agricultural commodities. In December, the FAO’s food price index reached the highest level since November 2014. Food prices are now the highest they’ve been for more than six years. Except for sugar, all sub-indices of the FFPI registered modest gains in December, with the sub-index of vegetable oil again rising the most, followed by that of dairy, meat and cereals.

Meat

Global meat prices rose by 2% in December, to end 2020 at the highest point since June.

Nonetheless, on average, meat prices during 2020 were 5% lower than in 2019 and by the end of the year the annual gap was even larger; the December quote was 12% down on December 2019.

Price trends varied between the main categories of meat in December. Poultry meat prices rebounded due to strong import demand from the Middle East, high domestic sales in key producing countries, and avian influenza outbreaks in Europe affecting production. Beef and sheep meat quotations increased too, mostly due to tight supplies from Australia and New Zealand due to herd-rebuilding demand. In contrast, pig meat prices fell slightly, influenced by the ongoing suspension of German shipments into China.

Cereals and oilseeds

Cereals prices were the highest since mid-2014 in December. Prices have been rising for six months on the back of both tighter supplies and stronger demand. In the same month, vegetable oil prices increased to the highest since September 2012. This was mainly driven by firming palm oil values, while those of soya, rapeseed and sunflower seed oil also increased. Ongoing supply tightness in major producing countries has been particularly influencing the palm oil price, while soyabean oil has been supported by reduced export from Argentina due to strike action.

Dairy

Dairy prices also increased in December, reaching the highest level since mid-2018. International prices of all milk products that constitute the index increased in December. Strong global import demand, mostly influenced by concerns over the outlook for Oceania’s milk production, has supported prices.

Bethan Wilkins

Senior Analyst - Red Meat

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