This may get more expensive | Wilnesh News

Market observers said that global food prices have recently risen to an 18-month high, and prices for some food baskets are expected to continue to rise.

October, World food commodity prices hit highest level since April 2023According to the latest data compiled by the Food and Agriculture Organization of the United Nations.

The FAO food price index, which monitors prices for a five-food basket of cereals, meat, dairy products, vegetable oils and sugar, rose 2% in October, driven mainly by a surge in vegetable oil prices.

The vegetable oil category saw the largest price increases between January and October, rising 24%, driven by higher prices for palm oil, soybean oil, sunflower oil and rapeseed oil. This is followed by FAO’s dairy category, which is up 17% from the beginning of the year, driven by cheese and cream prices. The meat category of this indicator has increased by 10% since the beginning of the year.

In contrast, the cereal category, Mainly includes wheat and ricedown 4.5%, while sugar fell nearly 5% compared with the same period last year. Analysts agree that supply-side factors, from weather to transportation challenges, are the main drivers.

The index measures raw commodity prices rather than retail costs, but the increase suggests rising food prices may continue to affect consumers.

According to industry experts who spoke to CNBC, here are some major food items that are likely to see more gains globally in the coming year.

according to National Palm Oil AssociationDomestic production in the first eight months of 2024 fell by nearly 5% compared with the same period last year.

“Indonesia’s push to use more palm oil to produce biodiesel is further exacerbating supply constraints,” Cheang told CNBC.

Other vegetable oils such as canola may also become more expensive due to similar supply challenges, the StoneX broker added.

Beef cattle farm that relies on rainfall to produce feed for its cattle susceptible to drought. During periods of drought, when pasture production and cattle feed availability decline, producers often need to purchase additional feed or reduce herd size, resulting in higher costs.

The United States is the world’s largest beef producer Be among the top exporting countries.

So far this year, feeder cattle futures traded on the Chicago Mercantile Exchange are up 16% at $2.59 a pound, according to FactSet. Feeder cattle simply refer to young cattle that are mature enough for slaughter.

Rabobank and British Agriculture and Horticulture Development Council Both men expect an overall decline in global beef production in 2025 to keep prices rising.

“Shrinking cattle herds in the world’s four largest beef-producing countries will lead to the first reduction in global beef supplies since the Covid-19 pandemic,” Rabobank analysts wrote in a recent report.

BMI commodities analyst Matthew Biggin said the sugar, coffee and cocoa markets face greater price uncertainty than other commodities.

Biggin said that while coffee and cocoa prices were not reflected in the FAO index, prices of these two commodities faced the “biggest risk”. The BMI report noted that adverse weather in major coffee-producing country Brazil has contributed to the bullish sentiment in the market.

Coffee futures traded on ICE have risen nearly 70% so far this year to $3.18 a pound.

For cocoa, concerns about heavy rains and low-quality cocoa beans in top producer Côte d’Ivoire have also put upward pressure on cocoa prices. Adverse weather conditions and disease have affected production in West Africa, which accounts for about 70% of global cocoa supply.

Although prices have retreated slightly from record highs, cocoa futures remain above typical levels, trading at $9,425 per ton on the U.S. Intercontinental Exchange.

Citi analysts said “the risk of renewed upward momentum over the next 2-3 months is high” and expected cocoa prices to rise to $10,000 per ton in the next three months.

Cocoa is a key ingredient Chocolate, and the price of this much-loved food has also been affected.

Trump recently said he would enforce An additional 10% tariff will be imposed on goods from China, and a 25% tariff will be imposed on goods from Canada and Mexico.

In 2022, Mexico will account for 69% of U.S. vegetable imports and 51% of fresh fruit imports. According to the latest data from the U.S. Department of Agriculture.

Mexico is a Main supplier of series Agricultural exports to the U.S. include avocados, tomatoes, raspberries, bell peppers and strawberries, according to the University of California, Davis.

“The foods with the largest price increases are those that are not produced domestically,” Ricard added.

Joseph Glauber, a senior fellow at the International Food Policy Research Institute, said that when Trump takes office in January, there may be a “new round of trade war” with China, which may cause great damage to agricultural trade.

He added that soybean, poultry and meat prices could be volatile if China retaliates.