The world’s food prices are at a 19-month high. Here’s why

The United Nations’ world food price index rose in November to its highest level since April 2023, recording its biggest gain in 19 months on the back of surging vegetable oil prices, data showed on Friday.

The price index, compiled by the U.N. Food and Agriculture Organization (FAO) to track the most globally traded food commodities, increased to 127.5 points last month from a revised 126.9 points in October, the highest level in 19 months and up 5.7% from a year ago.

The vegetable oil index jumped 7.5% above levels seen a month ago and 32% above those seen a year earlier, driven by concerns over lower than expected palm oil output due to excessive rainfall in Southeast Asia.

Soyoil prices rose on stronger global import demand, while rapeseed and sunflower oil also increased.

Other food price indexes declined.

Cereal prices dropped 2.7% from October thanks to weaker wheat and rice prices, while sugar fell 2.4% from October as India and Thailand began crushing and concerns over Brazil’s crop prospects eased.

In a separate report, the FAO trimmed its forecast for global cereal production in 2024 from 2.848 billion metric tons to 2.841 billion, a 0.6% decline from last year but still the second largest output on record.

World cereal utilisation, meanwhile, is set to increase 0.6% to 2.859 billion tons in 2024/25 thanks to growing consumption.

As a result, the FAO expects the cereal stocks-to-use ratio to fall to 30.1% at the close of the 2025 season from 30.8% previously, but still indicating a “comfortable level of global supply”.

—Maytaal Angel, Reuters