Global food prices have gone to a decade high and risen for the second consecutive month in September, according to a new report from the Food and Agriculture Organization (FAO).
The FAO Food Price Index, which looks at the monthly change in global prices of a group of food commodities, averaged 130.0 points in Sept. — that number is 32.1 points higher than the same month in 2020 and up 1.5 points from Aug. The FFPI has not seen these levels since 2011 when it reached 131.9.
The increase was largely caused by “tightening supplies and strong demand for staples like palm oil and wheat,” the FAO said.
Vegetable oil prices have gone up, brought on by stronger global demand combined with “continuing labor shortages” in Malaysia. The Vegetable Oil Price Index had an average of 168.6 points in Sept., which is around 60 percent above its year-earlier amount and is higher 2.9 points (or 1.7 percent) from the month of August.
The FAO Cereal Price Index also averaged 132.5 points in September, higher by 2.6 points (and 2.0 percent) from Aug. and 28.5 points (and 27.3 percent) above its amount from the same month in 2020.
“Among the top cereals, world wheat prices went up the most in the month of September, up around 4 percent month-on-month and as high as 41 percent year-on-year,” according to this report, which blamed the tightening exports and greater demand on rising prices.
Dairy and sugar also saw price boosts, while meat prices were aligned with the prices from August.
Huge supply chain disruptions, increasing freight costs, and labor shortages are also causing the problem to be worse, leading some companies to increase their prices to give money to suppliers and bring a profit.
A Biden White House Member of the Council of Economic Advisers has admitted that the U.S. could have higher inflation well into 2022 — despite earlier promises that it would “work itself out in the next months.” President Biden’s inflation is now reportedly taking the average American household for an extra $175 each month.
Author: Scott Dowdy