World food price index hits 18-month high on production concerns

While the index tracks raw commodity costs rather than retail prices, the rise indicates that higher food prices may continue to hit consumers.

Global food prices hit the highest level in 18-months in October, with unfavourable weather raising production concerns for many commodities and threatening to keep consumer costs higher for longer.

An index of food-commodity prices created by the United Nations’ Food and Agriculture Organisation rose to the highest since April 2023, according to data released on Friday. The gauge — that tracks grains, sugar, meat, dairy and vegetable oils costs — rose 2% in October, led by a jump in the cost of vegetable oils.

While the index tracks raw commodity costs rather than retail prices, the rise indicates that higher food prices may continue to hit consumers. Although food prices have rolled back from the record high witnessed in the wake of the Russia’s invasion of Ukraine, signs of tight supplies have fueled a fresh upward push in food prices.

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Vegetable oil prices jumped the most last month on worries about lower production, with palm oil leading the rally.

Unrelenting rains in the northern hemisphere have also put pressure on grains, while dry weather raised concerns about production in Brazil, driving up sugar costs.

© 2024 Bloomberg

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