Food prices are on a sugar high.
The UN Food and Agricultural Organization said that its food price index rose 16.4 per cent from a year before to the highest level since February 2015, pushed up by an increase in sugar and grains.
January sugar prices jumped 45 per cent from a year before and 10 per cent month-on-month, driven by expectations of protracted supply tightness in Brazil, India and Thailand.
Cereal prices hit a six-month high with wheat, corn and rice all increasing. Wheat markets reacted to unfavourable weather conditions hampering this season’s crops as well as reduced plantings in the United States of America, while higher corn prices mostly reflected strong demand and uncertain crop prospects across South America.
Rice also rose, in part due to India’s ongoing state procurement programme, reducing supplies for export.