India’s inflation outlook is facing fresh pressure as edible oil prices rise sharply, global supply risks grow and weather conditions threaten agricultural production.

Prices of packed sunflower oil have reportedly risen around 18%, while palm oil, soybean oil, groundnut oil and mustard oil have also recorded significant increases. The impact is particularly important for India because the country imports more than half of the edible oil it consumes.

The Russia-Ukraine war and disruptions in the Black Sea are adding another layer of uncertainty. Russia and Ukraine are major suppliers of sunflower oil and other agricultural commodities, while the Black Sea remains a crucial export corridor for wheat, corn, sunflower products and vegetable oils.

At the same time, concerns over El Niño and uneven monsoon rainfall could affect India's oilseed crops, including soybean, groundnut and mustard. Lower domestic production could increase India's dependence on imports and put additional pressure on food prices.

However, India's strong food-grain inventories and improved rainfall provide some cushion.

India Inflation Warning | Edible Oil Prices Surge As Black Sea War & El Niño Threaten Food Costs

The food and agriculture organization reports a 0.9 percent increase in global food prices for May, marking the third consecutive month of upward movement. This rise comes after a period of decline from the record highs set in March 2022.

Global food prices rise for third month in May

The Food and Agricultural Organization said Thursday that food prices reached a 10-year high in 2021, rising by an average of 28 per cent compared to the previous year.

FAO's Food Price Index, which measures monthly changes in the international prices of commonly traded food commodities, was slightly lower last month (December).

While it fell short of the February 2011 record of 137.6 points in February, at 133.7, it was still close to the previous record. The index stood at 125.7 points for the year as a whole, also the highest in a decade.

Also read |&nbsp;<a href="https://www.wionews.com/world/amid-concerns-of-food-security-grain-prices-rise-in-china-432316">Amid concerns of food security, grain prices rise in China</a>

Despite a decline of 0.9 per cent from November, this was still a 23.1 per cent increase over the same month the previous year.

"While normally high prices are expected to give way to increased production, the high cost of inputs, ongoing global pandemic and ever more uncertain climatic conditions leave little room for optimism about a return to more stable market conditions even in 2022," FAO Senior Economist Abdolreza Abbassian said in a statement.

Strong demand led to price increases in all food categories last year, he said.

Also read |&nbsp;<a href="https://www.wionews.com/world/global-food-prices-record-10-year-high-as-wheat-prices-soar-by-40-426984">Global food prices record 10-year high as wheat prices soar by 40%</a>

For the year as a whole, the Oil Index reached a record high, rising 65.8 per cent over 2020.&nbsp;

The price of another staple, sugar, fell by 3.1 per cent last month from November, reaching a five-month low. Overall, the Sugar Price Index rose 29.8 per cent, reaching its highest level since 2016.&nbsp;

In December, the Meat Price Index was "broadly stable," but it increased 12.7 per cent throughout the year. The Dairy Price Index increased 16.9 per cent compared with 2020.

Watch |&nbsp;Report: 2021 ranks as fifth hottest year

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/report-2021-ranks-as-fifth-hottest-year-442723/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

Additionally, the Cereal Price Index decreased 0.6 per cent; however, it rose 27.2 per cent for the full year, marking its highest level since 2012. Among the biggest gainers were maize, up 44.1 per cent, and wheat, gaining 31.3 per cent.&nbsp;

Rice, another key staple food, decreased by 4 per cent.&nbsp;

(With inputs from agencies)

The Food and Agricultural Organization said Thursday that food prices reached a 10-year high in 2021, rising by an average of 28 per cent compared to the previous year.

The Food and Agricultural Organization said Thursday that food prices reached a 10-year high in 2021, rising by an average of 28 per cent compared to the previous year. FAO's Food Price Index, which measures monthly changes in the international prices of commonly traded food commodities, was slightly lower last month (December). While it fell short of the February 2011 record of 137.6 points in February, at 133.7, it was still close to the previous record. The index stood at 125.7 points for the year as a whole, also the highest in a decade. Also read | Amid concerns of food security, grain prices rise in China Despite a decline of 0.9 per cent from November, this was still a 23.1 per cent increase over the same month the previous year. "While normally high prices are expected to give way to increased production, the high cost of inputs, ongoing global pandemic and ever more uncertain climatic conditions leave little room for optimism about a return to more stable market conditions even in 2022," FAO Senior Economist Abdolreza Abbassian said in a statement. Strong demand led to price increases in all food categories last year, he said. Also read | Global food prices record 10-year high as wheat prices soar by 40% For the year as a whole, the Oil Index reached a record high, rising 65.8 per cent over 2020. The price of another staple, sugar, fell by 3.1 per cent last month from November, reaching a five-month low. Overall, the Sugar Price Index rose 29.8 per cent, reaching its highest level since 2016. In December, the Meat Price Index was "broadly stable," but it increased 12.7 per cent throughout the year. The Dairy Price Index increased 16.9 per cent compared with 2020. Watch | Report: 2021 ranks as fifth hottest year Additionally, the Cereal Price Index decreased 0.6 per cent; however, it rose 27.2 per cent for the full year, marking its highest level since 2012. Among the biggest gainers were maize, up 44.1 per cent, and wheat, gaining 31.3 per cent. Rice, another key staple food, decreased by 4 per cent. (With inputs from agencies)

Global food prices rose ‘sharply’ during 2021, hitting a 10-year high: UN

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India Inflation Warning | Edible Oil Prices Surge As Black Sea War & El Niño Threaten Food Costs

Global food prices rise for third month in May

Global food prices rose ‘sharply’ during 2021, hitting a 10-year high: UN