Mubasher: Food prices worldwide surged in November, hitting their highest level since more than two years, mainly driven by meat and vegetable oil price increases, the Food and Agriculture Organization (FAO) said.

The United Nation’s food agency’s food price index (FFPI), which gauges monthly international price movements for a basket of food commodities, averaged 177.2 points last November, climbing by 2.7% on October.

This marked the highest level for the index since September 2017.

On an annualised basis, the index was 9.5 points higher 9.5% higher last month.

Vegetable oil prices saw the biggest gain during the month, soaring by 10.4% month-on-month from October, the highest level recorded since May 2018, led by palm oil.

The FAO index tracking meat prices averaged 190.5 points in November, jumping by 4.6% month-on-month, the sharpest monthly increase recorded since May 2009.

Beef and sheep meat prices led the rally against the backdrop of higher imports, especially by China and year-end holiday demand, and a tightening meat markets.

Sugar prices also jumped, with their respective FAO gauge rising by 1.8% to an average of 181.6 points, due to expectations of higher demand.

However, cereal prices bucked the trend, with a drop of 1.2% to 162.4 points, as large export supplies and fierce competition among the world’s top producers took a heavy toll on wheat prices, while rice prices hit six-month troughs owing to the arrival of new crops and weak import demand, the FAO said.

Looking ahead, the food agency raised its forecast for cereal production this year, by around 0.4%, with the global cereal output seen at 2.714 billion tonnes, versus 2018 levels.

Wheat production projection was raised slightly to 766.4 million tonnes, 4.8% higher than last year’s outturn.

World’s rice output was expected at 515 million tonnes, 1.6 million tonnes more than last month’s forecasts.