Food prices globally rose in May for the 12th month in a row, reaching a 40% year-over-year increase and sparking concern among economists and others.
May food prices rose 4.8% from April, the largest month-to-month increase in food prices in more than a decade. Demand is rising across the world for meat, cooking oil and other commodities. Factors include a surprisingly high demand for corn from China and drought in Brazil, a major source of corn exports. In the U.S., overall food prices were up 2.4% in April.
Cooking oil especially has been subjected to market pressure. Palm oil supplies are at their lowest level in four years, due partly to labor shortages related to the pandemic. And soybean oil prices have risen almost 70% this year, reaching an all-time high last week, due in large part to a renewed demand for soy oil in biofuels.
ADM and other major producers are ramping up their soy oil production capacity. Oil processing capacity is expected to nearly double this year from last.
