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Global food prices hit 26-month high in November

By Lawrence Gash

Meat price gains as swine-flu ravages China

Food prices around the world surged in November, with significant gains in the price of meat and vegetable oils offsetting a fall in the cost of cereals.

The United Nations’ Food and Agriculture Organisation (FAO) published its latest food price index report. The index measures monthly changes for a basket of cereals, dairy products, sugar, meat and oilseeds.

The FAO reported that the price of such a basket reached a 26-month high in November, up 2.17 per cent on October and up 9.5 per cent year-on-year.

The vegetable oil price index rose to its highest point since May 2018, led by stronger palm oil prices, it gained 10.4 per cent to 150.6 points. Increased biodiesel use, strong consumer demand and concerns over short supply caused the price of palm oil to gain.

The meat price index saw a similarly significant gain, with its biggest month-on-month increase since May 2009. The advent of the holiday season and increased demand from China contributed to its 4.6 per cent gain from October to 190.5 points.

A swine flu epidemic has ravaged China throughout 2019 with more than 1 million pigs provisionally slaughtered already. The Chinese government has been forced to increase international meat imports and to encourage the Chinese people to diversify their meat eating habits away from pork, the most loved meat.

A glut of cereal production has caused the its price to diminish. The FAO predicted that production would reach 2.714 billion tonnes in 2019, an all-time high. Consequently, the cereal price index fell 1.2 per cent in November to 162.4 points. An increase in production has caused the price of rice to sink to a six-month low. While a 4.8 per cent increase in wheat output similarly weighed on its value.

Increased demand led to a rise in the sugar price of 1.8 per cent. While dairy’s two-month price decline has similarly halted, reporting a marginal increase from October.

FURTHER READING: Blockchain and IoT ‘to save food industry $31bn by 2024’

FURTHER READING: Commodity definition

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