This Summer's Big Droughts Are Already Causing Global Food Prices To Rise

Food commodity price indices

Photo: FAO Food Price Index

Global food prices rose by 1.4 per cent on average during the month September, according to a report issued by the Food and Agricultural organisation of the United Nations (FAO) on Thursday. The report validated many of the concerns observers expressed over the summer regarding the effects that a string of global droughts would have on food prices.Dairy prices saw the largest increase at seven per cent, while meat prices rose 2.1 per cent and cereals 1 per cent.  The report credited the rise in dairy costs to a stable demand “combined with increasing feed costs.”  

The blistering heat over the summer in Europe, Russia and the United States forced a tightening of wheat supplies and a rise corn and soybean prices. These developments could have very well flooded over into the dairy and meat market, as rising wheat and maize prices influence the cost of feed.

Not all the news was negative. While the prices of meat, dairy, and cereals rose, the prices of sugar and oils fell.

And the FAO Food Price Index — which measures the prices of a basket of internationally traded food commodities — still stands below its peak in 2011, when food prices sparked unrest in Africa.

Here’s how food prices have risen since 1990:

Food Price index 1

Photo: FAO Food Price Index

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