In its latest report on global prices for basic food commodities, the FAO calculated an average of 130.8 points for the fifth month of 2016, a figure 0.2% lower than in April and 2.9 percentage points higher than that calculated for the same period of the previous year.
The analysis states that the stability is related to the fact that the decrease in vegetable oil prices offset the increases in cereal and sugar prices.
The rise in cereal prices highlights vulnerability to climate risks and disruptions in energy and input markets, FAO experts say.
In particular, they cite the negative effects stemming from disruptions to key trade routes, including the Strait of Hormuz, as a consequence of the war waged by the United States and Israel against Iran since February.
A reduction in fertilizer use, mainly due to problems arising from this conflict, is putting additional pressure on food prices, “underscoring the need for coordinated international action,” Boubaker Ben-Belhassen, Director of the FAO’s Markets and Trade Division, stated.
In fact, cereal prices rose 2.6% compared to April and 5.0 percentage points compared to a year ago, amid higher global fuel and fertilizer costs, as well as climate-related pressures.
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