Global food prices pushed higher again by surging grain costs

Published 05 Nov,2020 via Bloomberg Markets - Global food prices remain on a tear as tightening crop markets boost grain costs by the most in eight years.

A United Nations gauge of food prices rose for a fifth month to the highest since January, nearing a multiyear peak set just before the coronavirus crisis took hold. Last month’s increase was largely fueled by a rally in grains, with the UN’s Food & Agriculture Organization cutting estimates for crop production and stockpiles as adverse weather threatens corn and wheat supplies.

Rising food prices risk pushing up inflation and come as economies are struggling with the pandemic and many nations contend with a hunger crisis. Agricultural commodity buyers from Egypt to Pakistan have been boosting purchases of grains in efforts to protect themselves from potential supply chain disruptions, keeping inventories in key exporting nations under pressure.

Highlights from the UN:

• A gauge of grains prices jumped 7.2% in October to the highest in six years, pushing up global food costs by 3.1%.
• The FAO lowered its estimate for grains output in the 2020-21 season by about 13 million tons to 2.75 billion tons and trimmed its inventory outlook by almost 14 million tons.
• Vegetable oils, sugar and dairy prices also climbed last month.

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