World food prices increased by 3.1%

In August, the FAO reported a significant increase in world food prices, with the food price index averaging 127.4, a 3.1% increase from July and a 32.9% increase from the previous year. This rise was primarily due to higher prices for sugar, wheat, and vegetable oil. The sugar price index increased by 9.6% due to concerns about crop damage from frost in Brazil, although this was balanced by positive production forecasts in India and the EU, as well as a drop in crude oil prices and a depreciation of the Brazilian currency. The vegetable oil price index also rose by 6.7% due to concerns about potential production shortfalls in Malaysia. The cereal price index also increased by 3.4%, with wheat prices up by 8.8% due to lower production expectations in major exporting countries. However, corn prices fell by 0.9% due to positive production forecasts in Argentina, the EU, and Ukraine. Meat prices rose slightly in August, while dairy product prices slightly decreased. Despite lower production prospects, the FAO predicts that world cereal stocks will be adequate. The FAO also forecasts a slight increase in world consumption of cereals in 2021/22, but predicts a decline in world trade in cereals.