Global food prices rose 4% month-on-month in October, the biggest increase in three years

According to overseas media reports, the “strongest El Nino in a century” has finally begun to show its power in the market, with sugar, vegetable oils and dairy products leading the way, as global food prices posted their biggest increase in three years in October.

According to the latest data released by the UN Food and Agriculture Organization, the month-on-month increase in the global food price index in October this year was the largest in three years, reaching 4%. Among the sub-indices of this index, the sugar price index rose 17.2% compared with September, because Brazil's main sugar-producing region was hit by heavy rain. At the same time, drought weather in India and Thailand also sparked concerns among market participants. In addition, international soybean oil prices also rose, mainly because the market worried that weather conditions had hindered soybean sowing in some major producing areas.

It is reported that this round of El Nino sweeping the globe may be the strongest since records began in 1950, and has already brought heavy rain to parts of South America and drought to Southeast Asia. However, although the global food price index rose sharply month-on-month, it was still down 16% year-on-year. Some analysts said that agricultural product inventories in major countries remain high, and from a medium- and long-term trend perspective, agricultural product prices are still on a downward trend overall. Faced with the reality of inventories, or sticking to expectations of food price rises caused by El Nino, it depends on how agricultural product investors play the game.