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318. World Food Price Index for May 2021

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According to the Food Price Index released by the Food and Agriculture Organization of the United Nations (FAO) on June 3, 2021, world food prices in May 2021 rose the fastest in more than a decade, since October 2010, even though global grain production is expected to reach record levels. The FAO's Food Price Index averaged 127.1 points in May 2021, 4.8 percent higher than in April and 39.7 percent higher than in May last year.

This is due to the rise in the international prices of vegetable oil, sugar and grains. The grain price index rose 6% from April, pushed up by international corn prices, which soared nearly 90% on average from a year ago. This reflects sluggish production in Brazil against strong global demand. By the end of May, prices were settling down as production prospects in the US improved. Vegetable oil prices rose 7.8% in May, reflecting higher quoted prices for palm oil, soybeans and rapeseed oil. The rise in palm oil prices also pushed up soybean oil prices, reflecting slower-than-expected production growth in Southeast Asia against the prospect of robust global demand, especially in the biodiesel sector. Sugar prices rose 6.8 percent from April, reflecting concerns about declining production in Brazil, the world's largest exporter.

According to the Cereal Supply and Demand Brief, world cereal production in 2021 is expected to reach an all-time high of 2,821 million tons, up 1.9 percent from last year, pushed by a projected 3.7 percent increase in corn production. World cereal utilization increased by 1.7% to 2,826 million tons in line with global population trends. Cereal food consumption is equivalent to about 150 kg per person per year, while wheat is increasingly being used as livestock feed according to a recent trend.

We tend to think that cereals are produced for the staple food of humans. But in fact, only about 50% of the world's cereals is consumed directly, 40% is used to feed livestock, and the rest is used for biofuels and other purposes. In the 50 years since 1961, global meat consumption has almost doubled from 23 kg to 43 kg per capita. The United States, which originally had a high level of 88 kg in 1961, consumed 124 kg in 2017. During the same period, consumption in Japan increased 6.4 times, from 7.6 kg to 49 kg, and in China increased 18 times, from 3.3 kg to 60.6 kg. The expansion of agricultural production is considered to be one of the biggest causes of land use change resulting in greenhouse gas emissions and loss of biodiversity, and a shift from animal-based to plant-based food consumption has been proposed in the recent food system transformation debate. On the other hand, while most of the crops produced are consumed as staple food, there are many low-income developing countries where meat consumption is less than 10-20 kg per capita. At the same time, it is predicted that the qualitative and quantitative demand for food will change with economic development and urbanization, especially in developing countries, and will become a major factor influencing the balance of global food supply and demand. JIRCAS continues to provide information on trends and international discussions on global food and nutrition security.

Reference
FAO. Global food prices rise at rapid pace in May. 03 June 2021, Rome http://www.fao.org/news/story/en/item/1403339/icode/

Contributor: IIYAMA Miyuki (Director, Information Program)