World Food Prices Advance for First Time in Six Months on SugarWhitney McFerron
World food prices rose last month for the first time since April as sugar jumped amid harvest delays and a warehouse fire in Brazil that destroyed some supplies, the United Nations said.
An index of 55 food items climbed 1.3 percent to 205.8 in October from the previous month, the UN’s Rome-based Food & Agriculture Organization said in an online report today. An FAO gauge of sugar prices advanced 7.4 percent to 264.8, a third straight gain.
Raw-sugar futures touched a one-year high on Oct. 18 on ICE Futures U.S. in New York after rain delayed crops in Brazil, the world’s top producer and exporter, and a fire at the port of Santos ruined 180,000 metric tons of sweetener. Prices have since retreated 11 percent on an outlook for a fourth annual world surplus.
“Sugar prices were particularly volatile during the month of October,” the FAO said. “The increase in October was mainly attributable to harvest delays due to unfavorable weather conditions in the center-south region of Brazil. Also a fire that destroyed a major sugar warehouse at the Santos port in Brazil exacerbated the price surge.”
Global food prices are still down 5.3 percent from a year earlier and below a record 240.2 in February 2011, as world production of grains and oilseed rebounded following droughts last year in the U.S. and areas of the former Soviet Union and eastern Europe.
An FAO grain-price index rose 1.1 percent in October to 197.1, the first increase in five months. Wheat climbed amid “firm import demand” and declining crop prospects in Argentina and the Black Sea region, the UN agency said. Argentina, South America’s biggest wheat exporter, was affected by drought and frost, while Russia and Ukraine experienced planting delays for winter crops amid excess rain. Rice prices also rose in October while corn costs declined, the FAO said.
The FAO’s index of vegetable oils increased 2 percent to 188 in October, as a gain in palm-oil costs made up for declining soybean-oil values. Meat prices were little changed while dairy costs increased 0.4 percent, spurred by rising demand for whole-milk powder in China. Dairy prices are 25 percent higher than in October 2012, the FAO said.