Strong demand will boost food prices around the world in 2018, the FAO in Rome said today. She adds that the tense situation in oil-producing countries is likely to cause higher price volatility.
Food prices in 2017 increased by 8.2% compared to the previous year. This is the largest price increase since 2014, according to the United Nations Food and Agriculture Agency (FAO).
However, the food is still 24% cheaper than in 2011. The FAO regularly calculates an index of grain and oilseed prices, as well as prices for dairy products, meat and sugar. Although the index rose year-on-year, when compared to the December index with the November index, the index declined by 3.3% as prices for milk, vegetable oils and sugar fell significantly.
Currently, the opinion prevails that the supply of food is huge, but the demand is no less strong; the trade volume with food is growing steadily. Demand is growing in most countries around the world, and no one can tell now how the crops will be in 2018.Supply may still outstrip demand, but crude oil is a key factor in demand.
The fossil energy source is currently at such a high level as it has not been for several years, which will soon affect other commodity prices, according to a spokesman for the FAO. Increased demand for biofuels should support prices for vegetable oils, sugar and corn.
Text: HANSA Derivatives Trading GmbH /
