'Sugarflation' International Sugar Prices Surge 50% in One Year... "Production Decline Due to El Nino"

Global Food Price Index Falls 0.1% Month-on-Month
Oils, Meat, and Dairy Down, Grains and Sugar Up

International sugar prices have risen by nearly 50% compared to last year. This is attributed to concerns over reduced production in major producing countries and the rise in international crude oil prices.

According to the Ministry of Agriculture, Food and Rural Affairs on the 7th, the United Nations Food and Agriculture Organization (FAO) World Food Price Index for September 2023 recorded 121.5 points, a 0.1% decrease from the previous month (121.6 points). Prices of oils, meat, and dairy products fell, while grain and sugar prices increased.

The sugar price index rose 9.8% from 148.2 points in the previous month to 162.7 points. Compared to the same month last year, it surged 48.4%. Prices increased as sugar production is expected to decline due to dry climate conditions caused by El Ni?o in major producing countries such as Thailand and India. The rise in international crude oil prices also influenced the increase in sugar prices.

The grain price index rose 1.0% from 125.0 points in the previous month to 126.3 points. International wheat prices fell due to sufficient supply of Russian wheat. International corn prices increased due to a combination of factors including increased demand for Brazilian corn, slower supply from Argentina, and transportation difficulties caused by low water levels in the Mississippi River in the United States. International rice prices declined due to weak demand, but the decrease was limited due to uncertainties such as India's rice export restrictions.

The oils price index fell 3.9% from 125.8 points in the previous month to 120.9 points. Palm oil prices dropped as production increased in major Southeast Asian countries. Sunflower oil prices declined as harvesting and sales became active in the Black Sea region, and canola oil prices fell due to sufficient export volumes. Soybean oil prices also decreased despite expectations of sustained demand related to biofuels.

The meat price index decreased 1.0% from 115.4 points in the previous month to 114.2 points. International pork prices fell due to reduced demand from major importers such as China. Poultry prices declined as supply was sufficient from major exporting countries like Brazil. However, beef prices rose as import demand expanded mainly in the United States, despite increased exports from Brazil and Australia.

The dairy price index dropped 2.3% from 111.2 points in the previous month to 108.6 points. Prices of all dairy products fell, mainly due to ample stocks in major producing countries and limited urgent demand for dairy products. The expansion of New Zealand's export availability, weak domestic demand in Europe, and the euro's depreciation against the US dollar contributed to the decline in dairy prices. However, some dairy product demand increased in Southeast Asia towards the end of September.

Food Price Index by Item.