World Food Prices Hit New Record Highs

World Food Prices Hit New Record Highs
World wheat prices increased almost 5%, reaching their highest level since November 2012. (Photo: RIA)

World food prices rose for the third consecutive month in October to its highest level since July 2011, driven again by increases in cereals and vegetable oils, the United Nations Food and Agriculture Organization (FAO) said on Thursday.

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 133.2 points last month. The index is up 3% from September and 31.3 % higher than its level in the same month last year.

The FAO Cereal Price Index increased by 3.2% in October from the previous month, with world wheat prices up almost 5%, reaching their highest level since November 2012.

"Tighter availability in global markets due to reduced harvests in major exporters, especially Canada, the Russian Federation and the United States of America, continued to put upward pressure on prices," the FAO said.

World vegetable oil prices surged 9.6% on the month due to increase in palm oil prices as labour shortages in Malaysia continued to hamper production, according to the FAO.

In contrast, global sugar prices, following six straight monthly rises, decreased by 1.8% in October.

The FAO also cut its projection of global cereal production in 2021, to 2.793 billion tons from 2.800 billion estimated a month ago, according to its cereal supply and demand outlook.

That is mainly due to reduced wheat output estimates for Iran, Turkey and the U.S.