World food prices break three-year record in 2020

World prices for basic food products and raw materials in 2020 were the highest in the last three years. The Food and Agriculture Organization of the United Nations (FAO), informed based on the FAO food price index, reflecting monthly changes in international prices for major food types, Report states.

This indicator rose in December to 107.5 points, 2.2% compared to November, when the highest level of the index was recorded in almost six years. The average index figure for 2020 is 3.1% higher than in 2019. However, as indicated in the FAO report, it is lower by 25% of the historical record index recorded in 2011.

In particular, the FAO Vegetable Oil Price Index rose 4.7% in December, the highest since September 2012. The grain price index also continued to grow, increasing by 1.1% compared to November and by 6.6% compared to the average level in 2019. As FAO experts explain, the upward trend in export prices for wheat, corn, and rice is dictated by uncertainty about the projected high yields and weather conditions in the Americas and Russia. The price index for dairy products, which increased by 3.2% in December compared to November, has been growing for seven months in a row due to increased demand against the background of high domestic consumption of this type of product in the producing countries.

The FAO is not inclined to associate the rise in food prices solely with the pandemic, which led to some interruptions and delays in supplies. According to experts, price dynamics depends on the ratio of supply and demand.