The Food and Agriculture Organization of the United Nations (FAO) released its report on worldwide food prices for February and found that prices hit a record high last month. The February FAO Food Price Index reached a new high of 140.7 points, which reflects an increase of 3.9% from January. The index has increased by 20.7% since this time last year and could be further increased by the conflict in Ukraine, as the country is one of the world’s primary exporters of grain.
The FAO said this month’s increases were largely due to price hikes on vegetable oils and dairy products. “The FAO Vegetable Oil Price Index averaged 201.7 points in February, up 15.8 points (8.5 percent) month-on-month and marking a new record high. The continued price strength mostly stemmed from rising palm, soy, and sunflower oil prices,” wrote the FAO in its report.
The FAO also noted that rising crude oil prices are contributing to price hikes in multiple sectors. U.S. gas prices have surged past $4 a gallon on average, nearing a record high of $4.10 that was set in 2008. In California, gas prices have surged past $5 a gallon in multiple cities, including Los Angeles and San Francisco.
The FAO report on food prices added that meat and cereal prices had also increased, though not as dramatically as vegetable oils and dairy products. Cereal prices were up 3% over January and 14.8% over this time last year. Grain prices are expected to rise further following the escalation of the conflict in Ukraine. “World wheat prices increased by 2.1 percent, largely reflecting new global supply uncertainties amidst disruptions in the Black Sea region that could potentially hinder exports from Ukraine and the Russian Federation, two major wheat exporters. Coarse grain export prices also rose by 4.7 percent,” wrote the FAO.
Meat prices increased by 1.1% from January but are up 15.3% over January 2020. According to the FAO, demand for slaughter ready cattle reached record highs last month while pig meat prices also rose significantly. Sugar prices meanwhile have declined for the third consecutive month, reaching its lowest price point since last July.
The U.S. Department of labor has yet to release its Consumer Price Index report for February, though it is expected this week. U.S. food prices jumped 7% in January and could rise even higher as the war in Ukraine drags on. The U.S. inflation rate was at 7.5% in January, the highest since 1982.