The world food price gauge – the FAO Food Price Index – rose in January mainly due to vegetable oil supply constraints, the Food and Agriculture Organization of the United Nations (FAO) reported.
Averaging 135.7 points in January, the FAO Food Price Index was 1.1% higher than the previous month, according to the 3 February report.
The FAO Vegetable Oils Price Index led the January rebound, increasing by 4.2% month-on-month and reversing its December decline to reach an all-time high with prices for all major oils supported by rising crude oil prices.
Palm oil prices were underpinned by concerns over the possibility of reduced exports from Indonesia, the world’s leading exporter, while soya oil prices were supported by strong import purchases, particularly from India. Rapeseed oil prices were pushed up by ongoing supply tightness, according to the report, and sunflowerseed oil quotations were impacted by supply tightness and surging global import demand.
“Reduced export availabilities on top of other supply-side constraints, especially labour shortages and unfavourable weather, largely pushed vegetable oil prices up to an all-time high. There is a concern the impacts of these constraints will not ease quickly,” Boubaker Ben-Belhassen, director of FAO’s Markets and Trade Division, said.
Meanwhile, the FAO Dairy Price Index increased by 2.4%, its fifth consecutive monthly rise, with the highest increases for skim milk powder and butter.