LONDON- The United Nations’ world food price index rose in November to its highest level since April 2023, recording its biggest gain in 19 months on the back of surging vegetable oil prices, data showed on Friday.
The price index, compiled by the UN Food and Agriculture Organization (FAO) to track the most globally traded food commodities, increased to 127.5 points last month from a revised 126.9 points in October, the highest level in 19 months and up 5.7 percent from a year ago.
The vegetable oil index jumped 7.5 percent above levels seen a month ago and 32 percent above those seen a year earlier, driven by concerns over lower than expected palm oil output due to excessive rainfall in Southeast Asia.
Soyoil prices rose on stronger global import demand, while rapeseed and sunflower oil also increased.
Other food price indexes declined.
Cereal prices dropped 2.7 percent from October thanks to weaker wheat and rice prices, while sugar fell 2.4 percent from October as India and Thailand began crushing and concerns over Brazil’s crop prospects eased.
In a separate report, the FAO trimmed its forecast for global cereal production in 2024 from 2.848 billion metric tons to 2.841 billion, a 0.6 percent decline from last year but still the second largest output on record.
World cereal utilization, meanwhile, is set to increase 0.6 percent to 2.859 billion tons in 2024/25 thanks to growing consumption.
As a result, the FAO expects the cereal stocks-to-use ratio to fall to 30.1 percent at the close of the 2025 season from 30.8 percent previously, but still indicating a “comfortable level of global supply.”
Russia, unhappy about low global prices for wheat, has set an unofficial price floor for its wheat, according to Reuters sources, and sought to remove intermediaries from international trade. The country is also fighting inflation, with price growth for some staple foods in double digits this year.
Traders said Russian 12.5 percent protein wheat for December/January delivery was late this week around $223-$227 a ton on a free-on-board (FOB) basis, among the cheapest in the world, and down from $226-$231 late last week.
The Agriculture Ministry calculated the duty based on an indicative price of $233 per ton.
Last month, Russia cut the wheat export quota that will be applied in the second part of the export season from Feb. 15 to June 30, 2025, by two-thirds to 11 million metric tons.
Analysts from Rusagrotrans, Russia’s flagship grain rail carrier, predicted that as a result of the curbs and bad weather, Russian wheat exports will fall to 41-42 million tons in the 2024/25 season from 55.5 million in the previous season. They estimated that so far this season Russia exported a record 29 million tons of wheat to global markets, implying that exports are set to slow down sharply even before the quota is implemented in February.
