Global food prices soar to highest in a decade with slim hopes for 2022

Global food prices jumped 28% in 2021 to their highest level in a decade, the UN food agency said on Thursday, with slim hope of a return to more market conditions. stable this year.

The Food and Agriculture Organization of the United Nations (FAO) Food Price Index, which tracks the most traded food products globally, averaged 125.7 points in 2021, the highest since 131.9 in 2011.

The monthly index dipped slightly in December, but had risen for the previous four months, reflecting crop setbacks and strong demand over the past year.

Rising food prices have contributed to a wider spike in inflation as economies recover from the coronavirus crisis and the FAO has warned rising costs are putting the poorest people in countries at risk dependent on imports.

In its latest update, the food agency was cautious about whether price pressures could ease this year.

“While normally high prices are expected to give way to increased production, the high cost of inputs, the ongoing global pandemic and increasingly uncertain weather conditions leave little room for optimism about a return to more stable market conditions even in 2022,” the FAO chief economist said. Abdolreza Abbassian said in a statement.

A spike in fertilizer prices, linked to soaring energy prices, has pushed up the cost of so-called inputs used by farmers to produce crops, raising doubts about the yield prospects for crops in the ‘next year.

In December, prices across all categories of the food price index bar fell, with vegetable oils, dairy products and sugar falling significantly, the agency said in its monthly update.

He cited a lull in demand during the month, concerns over the impact of the omicron variant coronavirus and supplies from southern hemisphere wheat crops for the declines.

However, all index categories saw strong increases over the whole of 2021 and the FAO Vegetable Oil Price Index hit an all-time high.

Crop futures saw volatile trading at the start of 2022, with oilseed markets jolted by drought in South America and flooding in Malaysia.

Dairy prices maintained their recent strength in December, helped by lower milk production in Western Europe and Oceania, the FAO said.

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