Standard Chartered

Global food prices - consolidating at higher levels

Christmas dinner this year is going to be more expensive. The United Nations Food and Agricultural Organisation (FAO) food price index - which includes cereals, dairy, oilseeds, and meat products - was up 37% ytd in Sep 2007. This compares to a 9% increase in 2006. Data available from the main agricommodity exchanges also indicate a sharp rise in prices over the last 12 months. On the Chicago Mercantile Exchange (CME) soybean prices are up 57% ytd, rice prices are up 30% ytd, and corn prices have remained at elevated levels after rising over 90% y/y in Q1-06. Meanwhile, palm oil prices on the Bursa Malaysia are up 52% ytd. (total 16 pages)