Rising vegetable oil prices, alongside dairy, drove global food prices up in September, offsetting declining staple cereal grain, according to the latest Food and Agriculture Organization of the United Nations (FAO) report.
The FAO Food Price Index, which is used to measure the monthly changes in international prices of a basket of food commodities, averaged at 178.4 points in September, up 0.8% from August and 4.3% year-on-year, the organisation said in a 5 October statement.
The vegetable oil index was up 4.6%, which FAO said was primarily due to rising palm oil prices, although soya, rape and sunflower oil prices also increased.
The dairy index rose by 2.1% due to butter and cheese supply issues in Australia, the EU and New Zealand, while cereals declined by 1% as corn and wheat prices dropped due to oversupply and strong harvest forecasts.
FAO also updated its global cereal production forecast for 2017 by increasing it to 2.612bn tonnes, nearly 7M tonnes above the previous 2016 record.
According to the projection, the 2017 wheat harvest was expected to reach 750.1M tonnes, coarse grains 1.361bn tonnes and rise 500.7M tonnes.
By the close of the 2018 season, FAO forecast world cereal stocks to reach 720.5M tonnes, a new all-time record, which would take the global stocks-to-use ratio to 27%.
World trade in cereals was also expected to hit a new high over the current marketing year, reaching 403M tonnes due to increasing corn imports by China, the EU and Iran.