FAO: Global food prices rose in February, driven by sugar.
Dairy prices have also increased, according to the Food and Agriculture Organization.
ROME (Reuters) Global food commodity prices rose in February, driven by increased prices for sugar, dairy products, and vegetable oil, the Food and Agriculture Organization (FAO) reported on Friday.
The United Nations Food Price Index, which tracks monthly changes in the values of globally traded food commodities, averaged 127,1 points last month, up 1,6% from January and 8,2% from February 2024.
The surge was largely driven by sugar prices, which rose 6,6% compared to the previous month, fueled by concerns about tighter global supply for the 2024/25 season, partly due to unfavorable weather conditions in Brazil.
Dairy prices rose 4% compared to January, with all major dairy products experiencing increases, driven by strong import demand that exceeded production in key exporting regions.
Vegetable oil prices increased by 2% compared to the previous month and 29,1% compared to the previous year, largely due to higher prices for palm, soybean, and sunflower oils, driven by supply constraints in Southeast Asia and strong demand from the biodiesel sector.
The FAO cereal price index rose 0,7% compared to January.
Wheat prices rose due to supply shortages in Russia and concerns about crop conditions in Eastern Europe and North America, while corn prices continued to climb due to supply shortages in Brazil and strong export demand from the US. On the other hand, world rice prices fell 6,8% in February.
Meat prices fell 0,1% in the month.
In a separate report, the FAO predicted a modest increase in global wheat production for 2025, estimated at 796 million tons, about 1% more than the previous year.
This growth was supported by expected production gains in the European Union, especially in France and Germany.
However, challenges such as drought conditions in Eastern Europe and excessive rainfall in Western Europe could affect yields, the FAO warned. In the US, the area planted with wheat is expected to increase, although yields may decrease due to drought conditions.
Rice production is expected to reach a record 543 million tons in 2024/25, driven by positive crop prospects in India and favorable growing conditions in Cambodia and Myanmar.
The FAO also revised its estimate for global cereal production in 2024 to 2,842 billion tons, slightly higher than the 2023 level.
(Reporting by Crispian Balmer)
