Sugar up 4%... Prices of Grains, Oils, Meat, and Dairy All Rise
Increase in Key Imports Including Corn Price Index
[Sejong=Asia Economy Reporter Moon Chaeseok] With domestic consumer prices soaring last month?green onions up 270%, apples 51.1%, eggs 36.9%?the global food price index also showed an upward trend. Price indices for grains, oils, meats, and dairy products all increased, while the sugar index jumped 4% compared to the previous month. Concerns over excessive inflation due to COVID-19 herd immunity and economic recovery are growing.
According to the Ministry of Agriculture, Food and Rural Affairs on the 9th, the United Nations Food and Agriculture Organization (FAO) reported that the global food price index rose 1.7% (2 points) month-on-month to 120.9 last month. The global food price index has increased for 11 consecutive months since May last year (91.0). However, the rate of increase has slowed compared to January (4.3%), February (2.7%), and March (2.1%).
The sugar price index reached 100, rising 3.9% from the previous month. Prices increased due to supply concerns caused by delayed sugarcane harvests in Brazil and frost damage in France, coupled with the Brazilian real strengthening against the US dollar, Brazil being the largest exporter.
The grain price index rose 1.2% to 125.1. In particular, corn, a major import item, saw prices rise due to lower-than-expected US planting area estimates and demand reduction amid poor crop conditions in Argentina, Brazil, and the US. Wheat prices remained stable as global production prospects are expected to be favorable.
The oils price index increased 1.8% to 162. Palm oil prices rose as production growth in major exporting countries was slower than expected. Soybean oil and canola oil prices increased due to strong international demand in the biodiesel sector and limited supply.
The meat price index rose 1.7% to 101.8. Beef and lamb prices increased due to strong demand in the East Asian region. Pork prices also rose due to high import volumes in East Asia.
The dairy price index increased 1.2% to 118.9. Butter and cheese prices rose due to high demand in Asia.
Global grain production in 2020?2021 is projected at 2.767 billion tons, a 2.1% (57.1 million tons) increase compared to the previous year. Consumption is expected to rise 2.7% (72.5 million tons) to 2.7827 billion tons, while ending stocks are forecast to decrease 2.3% (19 million tons) to 850 million tons.
Earlier, on the 7th of last month, the government announced plans to apply an emergency zero percent tariff quota on major imported grains such as food corn. The tariff quota on food corn, previously 3%, will be reduced to 0%. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated, "We will temporarily apply a zero percent emergency tariff quota on some imported grains, including food corn, until the end of this year."
Regarding this, a Ministry of Agriculture, Food and Rural Affairs official said, "We are strengthening monitoring of key variables affecting global food prices, such as grain supply and demand in China and crop conditions in major producing regions like the US and South America. To respond to the international grain crisis, we will enhance communication and cooperation among related ministries, agencies, and industries, and consider additional measures."
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