World food prices rise for fourth month running, cereal outlook up

World food prices rose for the fourth month running in January, boosted by jumps in quotations for vegetable oils, sugar and wheat, the United Nations food agency said on Thursday. The Food and Agriculture Organization (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 182.5 points in last month, up 0.7% on the previous month.

FAO also predicted that cereal production would hit a new record in 2019 and come in some 2.3% higher than the 2018 crop. The FAO cereal price index climbed 2.9% month-on-month in January to record its highest value since May 2018, with the prices of all major cereals rising, led by wheat.

The vegetable oil index jumped 7.0% last month to reach a three-year high and the sugar price index climbed 5.5%, while the dairy index was up 0.9%. By contrast the meat price index fell 4.0%, ending 11 consecutive months of increases, with the price quotations for all meat categories heading lower, "pressured by reduced purchases, especially from China and the Far East," FAO said.

FAO also issued a new forecast for world cereal production, predicting a record high of 2.715 billion tonnes this year. "This month's forecast remains nearly unchanged from December, as downward revisions made for wheat and rice production are offset by upward adjustments for maize and barley," FAO said.