World food prices rose in January, buoyed by a rebound in dairy prices and stronger showings for vegetable oils and sugar, the United Nations food agency said on Thursday.
The Food and Agriculture Organisation’s (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 164.8 points last month against 161.8 in December.
Despite the rise, the index was still 2.2 per cent below its January 2018 level.
The FAO dairy price index jumped 7.2 per cent from December’s value, ending seven months of declines.
FAO said limited export supplies from Europe, caused by strong internal demand, was the main driving force behind the increase.
FAO’s vegetable oil price index rose 4.3 per cent from the previous month, while its sugar index rose 1.3 per cent and its cereal index made marginal gains in December.
The meat price index was largely unchanged.
FAO lifted its latest world cereal production forecast for 2018 to 2.611 billion tonnes, slightly higher than the December reading, reflecting upward revisions for maize, wheat and rice.
“Much of the projected growth is associated with expected increases in Europe, where beneficial weather has so far shored up yield prospects while also sowings are forecast to expand, largely driven by attractive prices,” FAO said.
Despite the rise in the latest projections, global cereal production is still expected to remain 1.8 per cent below the record high of 2017.