News:
The UN Food and Agriculture Organization released data showing its world Food Price Index (FPI) averaging 133.2 points in October, the highest since July 2011.
Key Highlights
- In May 2020, when the global economy was in the doldrums, it had collapsed to a four-year low of 91.1 points
- Much of this roller-coaster has had to do with oil. April and May 2020 saw Brent crude prices crash to an average of $25.27 and $35.33 per barrel, respectively. In October 2021, it was $84.38 a barrel.
- Reason why petroleum and agri-commodity prices move in tandem is the bio-fuels link. When crude prices rise, blending ethanol from sugarcane and corn (maize) with petrol or diverting palm and soyabean oil for biodiesel production becomes that much more attractive
- The flood of liquidity unleashed by the US Federal Reserve and other global central banks, to limit the economic damage wreaked by Covid-19.
About World Food Price Index:
- The FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities.
- It consists of the average of five commodity group price indices [cereal, vegetable, dairy, meat and sugar], weighted with the average export shares.
- The index has become a critical and timely monthly indicator of the state of international food markets, gauging the change in food commodity prices over time in nominal and real terms.
Food and Agriculture Organization (FAO)
- It is a specialized agency of the United Nations that leads international efforts to defeat hunger and improve nutrition and food security.
- It was founded in October 1945 and is headquartered in Rome.
- It maintains regional and field offices around the world, operating in over 130 countries.
- It also conducts research, provides technical assistance to projects, operates educational and training programs, and collects data on agricultural output, production, and development.
- Composed of 197 member states, the FAO is governed by a biennial conference representing each member country and the European Union, which elects a 49-member executive council.
Source- Indian Express, FAO
