Globally traded food commodities rose to their highest level in 18 months in October, driven by adverse weather conditions and other challenges.
The FAO Food Price Index, which tracks monthly changes in the international prices of these commodities, was up 2% from September and up 5.5% from October 2023, the Food and Agriculture Organization of the United Nations said in a Friday (Nov. 8) press release.
The index’s October reading was the highest since March 2022, which was the index’s peak and 20.5% higher than the latest figure, according to the release.
Four of the five categories of food commodities included in the index rose in October, per the release.
Vegetable oil prices jumped 7.3% and hit a two-year high, driven by concerns about production.
Sugar prices rose 2.6% due to extended dry weather conditions in Brazil and a shift of more sugarcane toward ethanol production amid rising crude oil prices.
Dairy prices were up 1.9% because of increases in international cheese and butter prices.
Cereal prices increased 0.9% due to unfavorable weather conditions impacting the price of wheat and transport challenges in Brazil affecting the price of maize.
The one category that saw prices decline in October was meat, the release said, adding that weak demand for pig meat was the primary reason for the 0.3% price drop.
The University of Michigan Surveys of Consumers found that consumer sentiment inched down in early October amid continued frustration over the prices of goods and services.
This measure of consumer sentiment dipped a “meager” 1.7% but marked a change from the gains seen during the previous two months.
Joanne Hsu, director of the Surveys of Consumers, attributed the decline to consumers’ “frustration over high prices.”
Food and shelter, among the most essential of all spending categories, are taking an outsized chunk of households’ paychecks — especially for lower-income consumers, PYMNTS reported in September.
At that time, spending on food accounted for nearly 13% of consumer expenditures, a figure that was 6.9% higher than it was in 2023. Food consumed at home (a proxy for groceries) was 6.1% higher, while food consumed away from home was up 8.1%.
