Last month was also the sharpest monthly rise in average food prices in over a decade, spiking 4.8% from April to May.
“The demand, really I would say, is almost surprising everyone,” Abbassian told CNN Business. “This demand requires a strong supply response.”
Higher usage of bio diesels and moderate global price increases for meat and dairy products also contributed to the steep rise in global food prices. The UN report said international palm oil quotations reached their highest level since February 2011 due to slow production growth of palm oil in Southeast Asian countries and rising global import needs are keeping inventories low in leading exporting nations.
“The demand has been quite robust in the vegetable oil sector in general,” Abbassian said.
Brazil has cut back on its corn and sugar experts amid its drought, according to Abbassian, who said speculation over how much corn Brazil and farmers in the US might produce this summer and early fall is a point of concern for food supply administrators and economists.
“This is the big question on everybody’s mind right now,” he said. “In the cereal sector, there were a lot of problems in terms of what will happen with this year’s production. There’s a lot of talk about droughts in Brazil really affecting the corn market.”