Global Food Prices Rose by 3% in September, Led by a 10% Surge in Sugar Prices

Oct. 7, 2024

Global food prices saw a 3% increase in September compared to the previous month, with sugar prices rising by over 10%. This rise reversed the declining trend observed in the past two months. According to a report by the Ministry of Agriculture, Food, and Rural Affairs, the United Nations Food and Agriculture Organization (FAO) announced that the global food price index reached 124.4 in September.

The index, which uses the average prices from 2014 to 2016 as a base value of 100, tracks monthly changes in the international prices of commonly traded food commodities. After recording a continuous decline in June (121.2), July (121.0), and August (120.7), the index returned to an upward trajectory in September. All five major food commodity groups—sugar, vegetable oils, dairy, cereals, and meat—saw price increases.

Sugar: Price Spike Due to Supply Shortage and Policy Shifts
Sugar prices soared by 10.4% in September, mainly driven by adverse weather conditions and a fire incident in Brazil in August, which raised concerns over reduced production. Additionally, the relaxation of regulations in India to allow more sugarcane to be diverted to ethanol production heightened fears of a decline in sugar exports, further contributing to the price hike.

Vegetable Oils: Prices Up Across All Major Types
The vegetable oil price index rose to 142.4, reflecting a 4.6% increase. Prices for palm, soybean, sunflower, and rapeseed oils all went up due to expectations of lower production volumes. Ongoing concerns about unfavorable weather in key producing regions also contributed to the price surge.

Dairy: Increased Demand from Asia and Supply Constraints in Europe
The dairy price index climbed by 3.8% to reach 136.3. A significant rise in whole milk powder prices, driven by increased demand from Asian countries, played a major role in this trend. Meanwhile, skimmed milk powder prices also increased due to reduced milk production in Western Europe. Butter and cheese prices followed suit, rising due to higher demand and dwindling inventories.

Cereals: Wheat and Corn Prices Rise, Rice Prices Drop
The cereal price index reached 113.5, marking a 3.0% increase. Wheat prices surged as harvests were delayed in major producing countries like Canada and the European Union (EU), and lower production levels were expected in the EU due to unfavorable weather. However, the price rise was somewhat limited by the availability of lower-priced wheat from the Black Sea region. Corn prices also increased, driven by transportation issues in Brazil and the United States and stronger domestic demand in Brazil. On the other hand, rice prices declined due to an increase in harvest volume in India and the lifting of export restrictions.

Meat: Poultry Prices Increase, Lamb Prices Decline
The meat price index recorded a modest increase of 0.4%, reaching 119.6. Poultry prices rose as demand for Brazilian chicken increased following the easing of trade restrictions related to Newcastle disease. Meanwhile, beef and pork prices remained stable, while lamb prices dropped due to weaker demand from China.

Overall, global food prices experienced broad-based increases in September due to a variety of factors, including weather conditions, policy changes, and shifts in demand. Future trends will likely continue to be influenced by these factors, as well as ongoing supply chain challenges and global economic conditions.


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