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Global Food Prices At 5-year High: FAO

World food prices rose for a third straight month in December to the highest level in five years, driven by a surge in prices of vegetable oil, the Food and Agriculture Organization said Thursday.

The FAO Food Price Index rose 2.5 percent from November to 18.7 points, the highest level since December 2014, the Rome-based agency said.

The index tracks monthly changes in the global prices of commonly-traded food commodities.

For the full year 2019, the index rose 1.8 percent to 171.5 points. That was still 25 percent below its peak in 2011, the UN food agency said.

The FAO Vegetable Oil Price Index jumped 9.4 percent from November, rising for the sixth consecutive month.

The surge was driven by palm oil prices, buoyed by both solid demand, especially from the biodiesel sector, and concerns about tightening supplies.

However, the vegetable oil sub-index had over the course of 2019 reached its lowest annual average since 2007 despite the December increase.

Sugar prices climbed 4.8 percent, partly driven by rising crude oil prices that led Brazil's sugar mills to use more sugarcane supplies to produce ethanol, in turn leading to reduced sugar availability in the global market.

Dairy prices rose 3.3 percent led by an almost 8 percent increase in cheese prices amid less exports from the EU and Oceania, the FAO said.

Cereal prices grew 1.4 percent, led by wheat prices, while the meat price index was roughly unchanged from the previous month. However, the latter rose 18 percent during 2019, driven by an increase in the prices of pig meat, caused mainly due to solid import demand from Asia.

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