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Food prices in the world have set a new record

World food prices exceeded the level of July 2011, when the previous maximum was set.

International food prices have updated a ten-year record, exceeding the level of July 2011. This is reported by the Food and Agriculture Organization of the United Nations (FAO) on Thursday, November 4.

In October 2021, the average value of the FAO Food Price Index, which allows monthly monitoring of fluctuations in world prices for the most marketable food products, was 133.2 points, which is 3% or 3.9 points higher than its September level. The index continues to grow for the third month in a row.

Compared with September, the value of the FAO Grain Price Index increased by 3.2% in October, while due to the deterioration of crop types in the main exporting countries, including Canada, Russia, and the United States, and a decrease in supply on global markets, wheat prices jumped by 5%. Compared with September, there was also an increase in world prices for other major types of grain.

In addition, the value of the FAO Vegetable Oil Price Index increased by 9.6% in October, reaching the highest level for the entire observation period. The growth is due to the growth of price quotations of palm, soybean, sunflower, and rapeseed oils. In October, palm oil prices continued to rise for four consecutive months, due to continuing concerns about low production volumes in Malaysia due to a shortage of migrant workers.

Also, the value of the FAO Dairy Products Price Index increased by 2.6 points compared to the September indicator due to the increased global demand for butter, skimmed, and whole milk powder and the desire of buyers to ensure an increase in stocks. Cheese prices, on the whole, remained at a stable level.

At the same time, the average value of the FAO Meat Price Index decreased by 0.7% compared to September — the price decline continues for the third month. World pork quotations fell due to a reduction in purchases from China, and beef — due to a sharp decline in quotations of meat supplied from Brazil. Prices for poultry and mutton increased, which was facilitated by high demand in the world against the expected slowdown in production growth.

The average value of the FAO Sugar Price Index decreased for the first time in six months and was 1.8% lower than the September level. The decline is mainly caused by limited import demand on world markets and the projected increase in exports from India and Thailand, as well as the weakening of the exchange rate of the Brazilian real against the US dollar.

FAO predicts that a record volume of grain production in the world is expected in 2021, and expects that their global stocks in the 2021-2022 agricultural year may decrease.

The FAO forecast for world grain production in 2021 was reduced by 6.7 million tons to 2,793 million tons compared to the previous forecast. The adjustment is due to lower estimates of production volume in Iran, Turkey, and the United States. The forecast for maize production in the world was raised taking into account the fact that yields in Brazil and India were higher than expected, as well as in connection with the improvement of crop types in several countries of West Africa. It is expected that the volume of grain production in the world will exceed the indicators of 2020 and reach a new record level.

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