Global wheat prices up 41% with consumption hitting ‘all-time high’

Global wheat prices are up 41% on last year due to “tightening export availabilities amid strong demand”, the Food and Agriculture Organization (FAO) of the UN has reported this week.

World cereal output in 2021 is on course to hit an all-time record of 2.8 billion tonnes, but that is less than the anticipated consumption requirements in the 2021/2022 marketing season, according to FAO projections.

World wheat prices are up almost 4% in September compared to August. Rice prices also rose in September, while those of maize increased by a moderate 0.3% – averaging 38% higher year-on-year.

“Among major cereals, wheat will be the focus in the coming weeks as demand needs to be tested against fast rising prices,” FAO senior economist Abdolreza Abbassian said.

FAO Food Price Index

The FAO Dairy Price Index increased by 1.5% from August, as “solid global import demand and seasonal factors” in Europe and Oceania “drove up international quotations” for all dairy products, especially butter.

The FAO Meat Price Index was “virtually unchanged in September from the previous month” and up 26.3% on an annualised basis.

Ovine and bovine meat quotations rose due to tight supply conditions, while those for poultry and pig meat “declined amid ample global supply volumes of the former and lower demand for the latter” in China and Europe.

Palm oil prices reached 10-year highs due to “robust global import demand and concerns over migrant labour shortages impacting production” in Malaysia.

World rapeseed oil prices also “appreciated markedly”, while soy and sunflower oil quotations declined.