World food prices rise 2 percent to reach 18-month high

On Sunday, the Ministry of Agriculture, Food and Rural Affairs said that the food price index issued by the UN Food and Agriculture Organization (FAO) as of October recorded 127.4 points, up by two percent compared to the previous month, to reach the highest figure since last April. It went up by 5.5 percent compared to a year ago. The FAO Food Price Index shows changes in international prices of five food groups (cereal, vegetable oil, dairy products, meat, and sugar) weighted by the average export shares of each group over 2014-2016.

Vegetable oil products turned out to be the biggest contributor to the hike in the overall price index by jumping 7.3 percent compared to a month ago. To be specific, concerns have been growing over the reduced production of palm oil in Southeast Asia, one of the biggest producers in the world, while soybean oil prices have been on the increase due to a lack of alternative veggie oil. Prices of sunflower and canola oil have also risen as there is expected to be a lack of supply from this year to the following year.

The sugar price index also rose by 2.6 percent as Brazil, the world’s largest exporter, is expected to produce less sugar. The diary and cereal price indices increased by 1.9 percent and 0.8 percent, respectively. Only the meat price index went down by 0.3 percent.

With food prices rising globally, processed food products will face upward pressure on prices in the domestic market. “If climate change frequently leads to production reduction, food commodities will become expensive across the globe,” said professor Baek Seung-woo of the Department of Agricultural Economics at Jeonbuk National University. “If protectionism intensifies amid the U.S.-China trade conflict, food prices will burden working-class families’ budget more.”


세종=이호 기자 number2@donga.com