World food prices surge to highest level since 2011

World food prices rose in May at their fastest monthly rate in more than a decade, posting a 12th consecutive monthly increase to hit their highest level since September 2011, the United Nations food agency said on Thursday.

The FAO also issued its first forecast for world cereal production in 2021, predicting output of nearly 2.821 billion tons – a new record and 1.9 percent up on 2020 levels.

The Food and Agriculture Organization's food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 127.1 points last month versus a revised 121.3 in April.

The April figure was previously given as 120.9. On a year-on-year basis, prices were up 39.7 percent in May.

The FAO's cereal price index rose 6 percent in May month-on-month and 36.6 percent year-on-year.

Corn prices led the surge and are now 89.9 percent above their year-earlier value, however, the FAO said they fell back at the end of the month, lifted by an improved production outlook in the United States.

The vegetable oil price index jumped 7.8 percent in May, lifted primarily by rising palm, soy and rapeseed oil quotations. Palm oil prices were boosted by slow production growth in southeast Asia.

Prospects of robust global demand, especially from the biodiesel sector, drove up soyoil prices.

The sugar index posted a 6.8 percent month-on-month gain, due largely to harvest delays and concerns over reduced crop yields in Brazil, the world's largest sugar exporter.

The meat index rose 2.2 percent from April, with quotations for all meat types buoyed by a faster pace of import purchases.

Dairy prices rose 1.8 percent on a monthly basis and were up 28 percent on a year earlier.

The increase was led by "solid import demand" for skim and whole milk powders, while butter prices fell for the first time in almost a year on increased export supplies from New Zealand.

The FAO said its forecast for record world cereal production this year was underpinned by a projected 3.7 percent annual growth in corn output.