World food prices soared by 28% during 2021, according to an index based on five major commodities, including cereal grains, meat, and sugar, said the UN Food and Agriculture Organization on Thursday. Five years of relative stability in Food Price Index was ended by the sudden increase as the world recovered economically from the pandemic.
The largest increases were observed in vegetable oils used as cooking oil, in dressings, and in sauces. The sub-index for vegetable oil exploded by 68% to reach its highest annual level. Cereal grains such as wheat, rice, and maize saw the second-largest increase of 27%.
Overall, the food price index was at its highest since 2011. The last year saw a significant increase in food prices.
“While normally high prices are expected to give way to increased production, the high cost of inputs, ongoing global pandemic, and ever more uncertain climatic conditions leave little room for optimism about a return to more stable market conditions even in 2022,” said Abdolreza Abbassian, FAO senior economist.
In the United States, food prices rose 6.1% in the past year, led by persistently high meat prices, the Labor Department said last month. Beef prices increased 21%. The Biden administration blamed big meat processors for “using their market power to increase (consumer) prices and underpay farmers.” Early this week, President Biden announced a four-point plan for increased competition in the meat industry, including vigorous enforcement of antitrust law.
According to the FAO, sugar prices increased by nearly 30% in 2021, their highest level since 2016. The FAO reported that meat prices rose by nearly 13% and dairy prices increased 17%.
The economic recovery has helped to boost soybean prices and other oilseeds used in vegetable oils production, but renewable diesel is creating new markets for vegetable oils. The American Bakers Association asked the EPA this week to scale back, rather than increase, its quotas for advanced biofuels, such as renewable diesel, for this year.
“The EPA’s proposed increase … could jeopardize the ability of our members to meet the constant demand of providing millions of baked goods to grocery stores, restaurants, and federal feeding programs,” said Lee Sanders, ABA senior vice president. “That’s because soybean oil, a critical ingredient for bakers, has been increasingly diverted away from the food supply chain and toward the production of advanced biofuels.”
Source: Successful Farming
