NEW YORK—Worldwide food prices jumped for the 12th consecutive month in May, rising close to 40% year-over-year, according to the United Nations’ food price index, CNN reports. May also registered the steepest monthly bump in average food prices in more than a decade, skyrocketing 4.8% from April to May 2021.
Abdolreza Abbassian, senior economist for the UN Food and Agriculture Organization, pointed to a surge in corn demand in China, Brazil’s continuing drought and more use of sugar, cereals and vegetable oils worldwide as the source of the higher prices. “The demand, really I would say, is almost surprising everyone,” said Abbassian. “This demand requires a strong supply response.”
Across the globe, inflation is jacking up prices on nearly all goods, including steel, lumber, energy and food. “The demand has been quite robust in the vegetable oil sector in general,” he said.
Because of Brazil’s drought, the country has slashed sugar and corn exports, fueling speculation on how much corn the country and U.S. farmers might produce this season. “This is the big question on everybody's mind right now,” Abbassian said. “In the cereal sector, there were a lot of problems in terms of what will happen with this year's production. There's a lot of talk about droughts in Brazil really affecting the corn market.”
In the U.S. this year, food prices have yet to stabilize after pandemic-related panic-buying pushed up prices a year ago. Overall, U.S. food prices jumped 2.4% in April from the same period in 2020, while produce prices increased 3.3% in the same time.
As reported in the NACS Daily, several food shortages have already hit foodservice retailers this year in the United States, including a chicken shortage and ketchup packet shortage.