According to the Food Price Index, published by the United Nations agency, the average price of a ‘basket’ of food staples rose by 0.7% from March with spikes in palm oil and cereals helping to drive increasing prices.
Despite rising for the third consecutive month, the FAO said April’s price index score of 151.8 points remains 10% below one year ago and more than one third lower than the Food Price Index highs seen in 2011.
The gradual increase in food prices in recent months has been ‘far from even’, according to the FAO, which highlighted that the current rises were driven largely by a “grim 2016 production outlook for palm oil coupled with a growing worldwide demand” which saw palm oil prices hit a 17 month high – leading to a 4.1% spike in the vegetable oil price index.
The FAO also noted that international prices for soy, which is the second most important oil crop to influence the vegetable oil price index, rose due to less favourable 2015/16 production prospects in South America.
Additionally, the organisation noted that the cereal price Index rose 1.5% throughout the month, primarily due to international maize quotations which were impacted by a weak U.S dollar.
Sugar prices, which provided a driver for strong growth in March (growing by 17%), were down by 1.7%, while meat prices rose 0.8% on the back of growing U.S. demand for Australian beef, said the FAO.
Dairy prices fell by 2.2% on average, as stocks of butter and cheese in major exporters continued to grow.
“As in the previous month, while prices for all dairy products fell, those of butter and cheese were the most affected,” said the FAO, which noted that global prices for skimmed milk powder (SMP) have remained close to the EU intervention price, sustained by intervention purchases which have made stocks in the EU surge compared to April last year.