UN: Global Grain Prices Hit Highest Level in 10 Years

Corn prices rose 44.1%, wheat prices 31.3%.

In the UN Food and Agriculture Organization (FAO), they said that for 2021 as a whole, grain prices reached their highest level since 2012 and were 27.2% above the 2020 level. 

Corn prices rose 44.1%, and wheat prices rose 31.3%. Rice prices fell 4%. 

The organization said in a statement: “In December 2021, prices of key food products fell, but for last year as a whole they were significantly higher than in 2020. Overall, the FAO Food Price Index fell 0.9% in December compared with November, to 133.7 points. This index, which tracks fluctuations in global prices of the most widely traded food products, was 23.1% higher than in December 2020.” 

For 2021 as a whole, the average FAO Food Price Index stood at 125.7 points, 28.1% above the 2020 level. 

Abdulreza Abbasian
Senior Economist, FAO

Under normal conditions, high prices lead to higher production, but rising resource costs, the ongoing global pandemic and increasingly unpredictable weather leave almost no hope of stabilizing the market situation in 2022. 

According to the organization, grain prices fell 0.6% in December compared with the November level. 

This was driven by lower export quotations for wheat as supply improved after the harvest in the Southern Hemisphere, which more than offset the rise in corn prices. 

The FAO noted: “In December, amid weak international demand, oil prices dipped slightly, but for 2021 as a whole, its average price rose 65.8% compared with 2020.” At the end of the year, sugar also became cheaper. 

The UN summed up: “Meat prices barely changed in December, but for 2021 as a whole they were 12.7% higher than in 2020. Butter and milk prices rose in December as their production fell in Western Europe and Oceania. Cheese, however, became slightly cheaper. But overall for 2021, the average dairy price index was 16.9% above the 2020 level.” 

In December 2021, it became known that global food prices continue to rise and exceed 2011 levels due to grain and dairy products. 

1. Dairy prices rose 3.4% in November 2021, as strong global demand for butter and dry milk powder persisted. 
2. The grain price index rose 3.1%, 23.2% above November 2020. Export prices for corn rose, while rice prices remained stable. The increase was driven by high demand amid limited supplies. 
3. Vegetable oil prices fell 0.3% in November. Soybean and rapeseed oil became cheaper, while palm oil prices remained stable. 
4. The sugar price index rose 1.4%, 40% above the 2020 level. The increase was due to higher ethanol prices. 
5. Meat prices fell 0.9% compared with October 2021. The cause was weak demand for pork from China, while sheep prices fell sharply due to increased export shipments from Australia. 

Meanwhile, in October 2021, global food prices reached their highest level since July 2011 due to oil prices rising to a historic record.