Global food price reached its highest level in the last few years

Economy Adina Camarasu
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The index of the food prices at a global level increased by 2,1% in January 2017, compared with the previous month.

It managed to reach the highest level since January 2015, due to the increase in sugar quotations and prices for cereals and vegetable oils.

The study was released on Thursday by the United Nations of Food and Agriculture Organisation.

FAO publishes on a monthly basis its own Food Price Index, which measures the price changes for a basket of food formed of cereals, vegetable oils, dairy, meat and sugar.

In January 2017, the index reached 173,8 points, up with 3,7 points compared to the value registered in December 2016. Compared to January 2016, the value registered an increase of 24,5 points.

According to the study, the sugar prices last month rose by 9,9% compared to December, amid forecasts for a lower production in Brazil, India and Thailand.

Cereal prices rose by 3,4% and the price of vegetable oils increased by 3,3%.

A chief economist, Abdolreza Abbassian, said that some external factors, including the world’s concerns over the commercial policy of the US President, Donald Trump, are likely to contribute to the increased food price volatility.

‘The uncertainties will create problems in international markets, for example, with regard to where Mexico will supply its corn needs, given the current trend regarding the relations with the US, its main trading partner’, said Abbassian.

Also, the relations between Russia and Ukraine, some major exporters of cereals, will also have a great impact on the market.

In parallel, FAO has improved on Thursday its estimations regarding the world cereal production in season 2016 – 2017, to 2,592 billion tonnes, 15 million tonnes (0.6%) over the forecasts.