World Food Price Index Hits 6 Year High, Fears of Reduced Harvest, Bad Weather and Price Increases

In November the world food price index rose for the six straight month to a 6 year high reported PressTV via twitter. This reflected the biggest monthly increase since July 2012, according to report from the UN food and agriculture program. The world food price index measures monthly changes for a basket of cereals, wheat, dairy, meat, sugar, and oilseeds. Drivers that may effect food index pricing include reductions in harvest. inclement weather, yield fluctuation, and price increases, according to Reuters.

The world food price index average increased to 105 points in November which reflected an increase from October’s 101 point average. According to a Reuters report, The cereal price index rose in November from the month before, 19.9 percent. The cereal price index increase represents a record high and is 1.3 percent above last year’s level, reports Reuters.

Wheat export prices inched higher as a result of “reduced harvest prospects” in Argentina, reports Driven by higher prices and fears that recent dry weather could curtail wheat planting and effect yields, the 2021 wheat crop planting season has begun in the northern hemisphere. Wheat sowing in major producing countries is expected to increase.

Lower crop forecasts in the United States and Ukraine resulted in an increase in maize prices, reports Reuters. Fears of a future shortfall in global production of sugar as poor weather hits crop prospects in the European Union, Russian and Thailand resulted in sugar price increases of 3.3 percent from October. Average sugar prices increased 3.3% from October levels.

Price increases in butter and cheese resulted in a “0.9 percent rise in the dairy index for the month”; to a near 18 month high. “The meat index rose 0.9 percent, and experienced declines for nine consecutive months; and is down 13.7 percent on the FAQ.” The charge in the “overall index moved significantly higher by 14 percent month-on-month”, according to Reuters.


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