World food prices rose to a 10-month high in March as crop damage from dry weather across the globe lifted the cost of everything from beef to wheat.
An index of 55 food items climbed 2.3 percent to 212.8 points from a restated 208 in February, the Rome-based United Nations’ Food & Agriculture Organization said on its website today. The gauge, at its highest since May, is still down 1 percent from a year earlier.
U.S. Gulf wheat export prices tracked by the International Grains Council jumped 12 percent last month, the biggest surge since July 2012, as crop conditions in Texas and Kansas deteriorated due to drought. Beef prices rose as dry weather affected production in Australia and the U.S., while sugar gained on drought in Brazil, the biggest producer.
"Last month’s increase was largely driven by unfavorable weather conditions affecting some crops and geopolitical tensions in the Black Sea region," the FAO wrote.
Russian troops last month took control of the Crimea peninsula to the southeast of Ukraine’s main grain-export ports. About 25 percent of Kansas wheat was in poor to very poor condition as of March 30, from 21 percent a week earlier, the U.S. Department of Agriculture reported this week.
The FAO’s index of grain prices climbed 5.2 percent last month to 205.8 points, the biggest jump since July 2012. That’s still below where the indicator was in July, and 14 percent below the year-earlier level.
Coffee, hogs and corn are the best performers on the S&P GSCI gauge of 24 commodities this year, after sliding last year.
A gauge of sugar prices jumped 7.9 percent in March to 253.9 points, the most since July 2012. Drought in Brazil and reduced cane output in Thailand boosted the sweetener, as well as the likelihood of sugar crops being adversely affected by an El Nino weather event later this year, FAO said.
The cooking oils index advanced 3.5 percent to 204.8 points, the highest level since September 2012. Palm oil prices were lifted by limited inventories in Malaysia, an outlook for rising usage in Indonesia and the possibility of El Nino later this year, according to the FAO.