The FAO Food Price Index averaged 113.3 points in January 2021, an increase of 4.7 points (4.3%) from the previous month. This is not only the eighth consecutive month of increase in the index, but also Set the highest monthly average level since July 2014. The index increase in January was mainly driven by the strong growth of the sugar, grain and vegetable oil indexes, while the meat and dairy product index values also rose, but the magnitude was smaller.
The FAO Cereal Price Index averaged 124.2 points in January, a sharp increase of 8.3 points (7.1%) from the previous month, marking the seventh consecutive month of increase. International corn prices have risen sharply. They soared 11.2%in January and 42.3%year-on-year, reflecting the increasingly tight global supply, lower-than-expected production and inventory in the United States, and massive purchases by China. Worries about the drought in South America and Argentina’s suspension of corn export registration supported the gains, and international corn prices rose to their highest level since mid-2013. Among other coarse grains, prices of barley also rose by 6.9%in January due to strong demand and rising prices of corn, wheat and soybeans, while prices of sorghum remained stable. Wheat prices also rose strongly by 6.8%in January due to rising corn prices and strong global demand. At the same time, Russian wheat export tariffs will double from March 2021, resulting in lower expected sales. Under the dual effects of strong demand from Asian and African buyers and tighter supplies in Thailand and Vietnam, rice export prices in January continued to be supported.
The FAO Vegetable Oil Price Index averaged 138.8 points in January, an increase of 7.7 points (5.8%) from the previous month, the highest level since May 2012. The index rose for the eighth consecutive month, mainly reflecting the rise in palm oil, soybean oil and sunflower oil prices. Affected by excessive rainfall and the continued shortage of foreign labor in Malaysia, palm oil production in Indonesia and Malaysia was lower than previously expected, and international palm oil quotations rose to an eight-and-a-half-year high. At the same time, due to the decline in export supplies and the prolonged strike in Argentina, international soybean oil prices rose for the eighth consecutive month. The continued tightening of the global supply of sunflower oil caused by the sharp decline in the sunflower seed harvest in 2020/21 has continued to push up its prices.
The FAO Dairy Price Index averaged 111.0 points in January, an increase of 1.7 points (1.6%) from the previous month, and the eighth consecutive month of increase, and a year-on-year increase of 7.1 Points (6.9%). The quotations of butter and whole milk powder rose in January, as the Chinese New Year holiday triggered a large number of purchases in China, while New Zealand’s export supply declined seasonally. Affected by strong import demand from spot supply and delayed production activities in Western Europe, the quotation of skimmed milk powder has also been raised. In contrast, sales restrictions within Europe and increased inventories in the United States have caused cheese prices to fall slightly from their December 2020 highs.
FAO Meat Price Index* averaged 96.0 points in January, an increase of 0.9 points (1.0%) from the previous month, and the fourth consecutive month of increase, but still falling year-on-year 7.6 points (7.3%). The international quotations of all types of meat included in the index rose across the board in January. Among them, poultry meat rose the most, especially poultry meat produced in Brazil. The reason is that global import demand is strong, and the outbreak of avian influenza has restricted several European countries. The country’s poultry exports. Although China purchases a lot on the eve of the Spring Festival, the global supply is still sufficient to meet the demand, so the quotations of beef and pork only slightly increased. Driven by tight supply in Oceania and strong demand from China, mutton prices have risen for the fourth consecutive month.
The FAO Sugar Price Index averaged 94.2 points in January, an increase of 7 points (8.1%) year-on-year, and the highest level since May 2017. The price increase is mainly due to the worsening production prospects in the European Union, Russia and Thailand and the drier weather in South America than usual, triggering market concerns about the decline in global supply in 2020/21. The recent increase in crude oil prices and the strengthening of the Brazilian real against the U.S. dollar have provided further support for sugar prices, which often affect the shipments of Brazil, the world’s largest sugar exporter. The continued strong global import demand for sugar also supports prices. India is expected to usher in a bumper harvest, and the government has also approved export subsidies for 2020/21, the country’s potential large export supply to a certain extent suppressed upward pressure on prices.
* Unlike other commodity categories, when calculating and publishing the FAO Food Price Index, most of the prices used to calculate the FAO Meat Price Index are still uncertain ; Therefore, the meat price index in recent months is obtained after comprehensively forecasting prices and actual prices. This sometimes requires substantial adjustments to the FAO Meat Price Index to arrive at the final figure, which in turn may have an impact on the FAO Food Price Index.