Global food prices rose sharply during 2021

January 7, 2021

Global Food Prices Rose ‘Sharply’ During 2021

According to the Food and Agriculture Organization (FAO), the UN’s benchmark food and commodity prices index rose sharply on average through 2021, compared with the previous year. The agency’s Food Price Index, which tracks monthly changes in international prices, averaged 125.7 points – a 28.1 per cent increase over 2020. FAO Senior Economist Abdolreza Abbassian explained that, normally, high prices are expected to ease as production rises to match demand. This time, however, the consistently high cost of inputs, the ongoing global pandemic, and ever more volatile climatic conditions “leave little room for optimism about a return to more stable market conditions even in 2022.”

Year’s End

At the end of the year, world food prices fell slightly, as international prices for vegetable oils and sugar fell significantly, the data shows. The Food Price Index averaged 133.7 points, a 0.9 per cent fall from November, but was still up 23.1 per cent from the same month the year before. Only dairy posted a rise that month.  The Cereal Price Index also fell 0.6 per cent; for the full year, however, it reached its highest annual level since 2012, increasing 27.2 per cent. Biggest gainers were maize, up 44.1 per cent, and wheat, gaining 31.3 per cent. One of the world’s other key staple foods, rice, lost 4 per cent.

Oil And Sugar

The Vegetable Oil Price Index declined 3.3 percent in December, due to lower global import demand, that may be linked to concerns over the impact of rising COVID-19 cases, which have led to delays in the supply chain. For the year as a whole, the Oil Index reached an all-time high, increasing 65.8 per cent compared with 2020. Another key staple, sugar, dropped by 3.1 per cent last month from November, reaching a five-month low.

FAO analysts said this shows concerns over the impact of the Omicron variant on global demand as well as a weaker Brazilian Real, combined with lower ethanol prices. For the year as a whole, the Sugar Price Index rose 29.8 per cent, reaching its highest level since 2016.

Meat And Dairy

The Meat Price Index was “broadly stable” in December, but increased 12.7 per cent through the year as a whole. Dairy was the only category where prices climbed in the last month of the year, rising 1.8 per cent on November, mostly because of lower milk production in Western Europe and Oceania. Cheese prices fell marginally last month, but for the year overall, the Dairy Price Index averaged 16.9 per cent higher than 2020.


Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however, its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned here.