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FAO says food prices rose by a third in August

Food prices

Food prices rose globally by a third during the month of August, due to an increase in the prices of basic commodities, the Food and Agriculture Organization (FAO) said.

FAO said that food prices fell and rose, supported by a strong increase in prices of sugar, vegetable oils and cereals.

The increase came by 33% during August, which increases the troubles of the world suffering from the scourge of the Coronavirus pandemic, the organization said.

Food prices

The Rome-based FAO also said in a statement that global cereal crops will reach nearly 2.788 billion tons in 2021, down from its previous estimate of 2.817 billion tons, but still higher than 2020 levels.

The FAO Food Price Index, which tracks global prices for most of the world’s most traded primary food commodities, averaged 127.4 points last month, compared to 123.5 points in July.

The previous reading for July was 123.0 points.

On an annual basis, prices rose 32.9 percent in August.

FAO said its lower estimate for world cereal production this year is due to persistent drought conditions in several major producing countries.

Among the main grains, wheat production forecasts witnessed the biggest downward revision, falling by 15.2 million tons since July to 769.5 million tons, mainly due to bad weather conditions in the United States, Canada, Kazakhstan and Russia.

Food imports

FAO had expected that the costs of global food imports would rise by 12% during the current year 2021 to a record level.

The organization attributed its expectations of higher prices to the high prices of basic commodities and the increase in demand.

The organization said in a previous report, “The bill for food imports around the world, including shipping costs, is expected to reach $1.715 trillion this year, from $1.530 trillion in 2020”.

The costs of merchandise imports in general, as of the last quarter of 2020, increased due to confusion in supply chains, whether from raw materials markets or industrial countries towards consumer markets.

The report added that the rise in prices since late 2020, has increased the risks for poor countries that depend on imports.

The monthly food price index recorded its highest level in 10 years last May, reflecting sharp gains for cereals, vegetable oils and sugar, according to the report.

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