Global food prices rose to a two-year high in April. The UN index, which tracks food prices, rose 1% from the previous month to 128.3 points. The last time the indicator was at this level was in March 2023, Bloomberg writes.
While it takes time for the effect to show in supermarkets, and the indicator remains below the 2022 peaks, this move points to the likelihood of higher prices for goods after a period of declining food inflation.
“Currency fluctuations affected price dynamics in world markets, while tariff policy adjustments increased market uncertainty,” the Food and Agriculture Organization of the United Nations (FAO) said in a statement. At the same time, Bloomberg notes, a jump in the prices of grains, meat and dairy products is also pushing the index up.
The FAO Meat Price Index averaged 121.6 points in April, up 3.2% from March and 4.0% above a year earlier. Meat prices rose across all categories, with pigmeat posting the largest gains. Bovine meat prices also rose, particularly in Australia and Brazil, due to stable demand and tight supplies. Ovine meat prices rose sharply, supported by strong demand in key markets. Poultry meat prices rose moderately, particularly in Brazil, where strong export demand and slower processing during the festive period limited available supplies.
The FAO Dairy Price Index averaged 152.1 points in April, up 2.4% from March and 28.4 points (22.9%) from a year earlier.
Skimmed and whole milk powder prices rose 1.6% and 29% respectively, supported by robust domestic demand and a shift in export interest away from Europe (where a strong euro is reducing competitiveness) and towards Oceania, where seasonally lower production is constraining supplies.
Cheese prices rose 2.3% from March, supported by strong export demand and tighter supplies from Oceania.
International butter prices rose for the third month in a row. They climbed a further 2.9% in April to a new all-time high.
“The jump was largely driven by higher European prices, supported by destocking and strong demand for butterfat, despite seasonally higher milk production,” the publication said.
