Vegetable oil prices push FAO Food Price Index to 19-month high

By Tuba Ongun

Global food prices inched higher in November as surging vegetable oil and dairy costs pushed the UN Food and Agriculture Organization (FAO) Food Price Index to 127.5 points, its highest level since April 2023.

The index was up 0.5% from October and 5.7% from November 2023, the UN food body said.

While vegetable oil prices surged, declines in meat, cereal, and sugar prices offset the overall hike.

The FAO Vegetable Oil Price Index soared 7.5% month-on-month to 164.1 points in November, its highest level since July 2022. Palm oil prices led the surge, bolstered by concerns over lower-than-expected production due to excessive rainfall in Southeast Asia.

The dairy price index edged up 0.6% to 139.9 points during the same period, driven by whole milk powder. Butter prices hit a record high, fueled by tight inventories and strong demand.

The FAO Cereal Price Index dropped by 2.7% to 111.4 points last month. Wheat prices dropped as harvests in the Southern Hemisphere boosted supply, and improved crop conditions in key Northern Hemisphere regions eased concerns.

The indexes for meat and sugar dipped by 0.8% and 2.4% to 118.1 points and 126.4 points, respectively.