Stronger demand and a weakening US dollar increased global food prices in August, according to the Food and Agriculture Organization of the United Nations (FAO).
The FAO Food Price Index, which tracks the international prices of the most commonly traded food commodities, averaged 96.1 points in August, up 2% from the previous month and reaching its highest level since February 2020.
The FAO Cereal Price Index rose by 1.9% from July, averaging 7% above its value in August 2019. The increase was led by coarse grains. Sorghum prices also rose with a jump in demand from China. Damage from the derecho storm that hit Iowa in early August pushed maize prices up 2.2%. Rice prices increased due to a boost in demand from African countries and decreasing supplies.
The FAO did lower its world cereal production forecast based on expected lower maize output from the United States. Despite the lowered forecast, the FAO anticipates global cereal output to total 2.765 billion tonnes in 2020, 58 million tonnes above 2019.
The FAO expects global cereal stocks to rise 1.7% to 895.5 million tonnes by the end of 2021 seasons.
“Translating to a world cereal stocks-to-use ratio of 31.8%, slightly down from July but still relatively high from a historical perspective,” the FAO said.
World trade in cereals for 2020-21 is forecast at 441.4 million tonnes, 1.6% above 2019-21 due to anticipated larger shipments of rice and coarse grains, the FAO said.
The FAO Vegetable Price Index jumped by 5.6% due to increased demand in soy and palm oil.
The FAO Sugar Price Index also rose due to reduced production prospects from unfavorable weather conditions in the EU and Thailand.
The FAO Dairy Price Index remained unchanged from the previous month, with cheese and whole milk powder demand decreasing while butter’s demand increased.
Although down 8.9% from August 2019, the FAO Meat Price Index for August 2020 also remained unchanged compared to the previous month. Increased pigmeat demand from China offset the lowered demand of bovine, poultry and ovine.