High prices of sugar, dairy, and vegetable oil have led to a surge in global food prices in February, according to a recent report released by the Food and Agriculture Organisation (FAO).
The Food Price Index report, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 127 points in February, up 1.6 per cent from its value in January.
“While the meat price index remained stable, all other price indices rose, with the most significant increases recorded for sugar, dairy and vegetable oils,” the report noted.
According to the FAO, the overall index for February was 8.2 per cent higher than its corresponding level one year ago. However, it remained 20.7 per cent below the peak reached in March 2022.
The average price of sugar was 119 points in the period, rising 7 per cent from its January value. This price surge comes after three consecutive monthly declines in October, November and December of 2024.
The FAO reported that the surge was driven by concerns over tiger global supplies in the 2024/2025 season.
“Declining production prospects in India and concerns over the impact of recent dry weather on the upcoming crop in Brazil, which exacerbated the seasonal effect, underpinned the increase in prices,” it said.
However, while sugar prices increased in February, it is 16 per cent lower than its value in the corresponding period of 2024.
Dairy prices indexed 149 points in the month of review, rising by 2 per cent from January. On a year-on-year basis, it is 23 per cent higher than its value a year ago.
“The increase was driven by higher prices across all major dairy products. International cheese prices increased for the third consecutive month, rising by 4.7 percent from January,” the FAO noted.
It added that the rise was fuelled by strong import demand, as recovering production in Europe was offset by seasonal output declines in Oceania.
Similarly, quotations for whole milk powder increased, up 4.4 per cent from January, underpinned by robust demand despite stagnating production in Oceania.
The FAO said vegetable oil prices averaged 156 points in the review period, rising by 35 per cent from its value a year ago.
It said: “The increase in the index was driven by higher quotations across palm, rapeseed, soy and sunflower oils. After a brief decline in January, international palm oil prices rebounded moderately and maintained their premiums over competing oils.”
According to the report, the price surge was largely underpinned by seasonally lower outputs in Southeast Asian producing countries and expectations of increased demand from the biodiesel industry in Indonesia.
While prices of these three commodities rose significantly, prices of meat and cereal rose slowly, averaging 118 and 112 points, respectively.
“International poultry meat prices declined, driven by abundant global supplies primarily due to high export availabilities from Brazil, despite continuing avian influenza outbreaks in other major producing countries,” the report revealed.
(BusinessDay)
