The following may be more expensive

Global food prices recently rose to an 18-month high, with some food baskets expected to rise further, according to market observers.

Global food prices in October were at their highest since April 2023, according to the latest data from the Food and Agriculture Organization of the United Nations.

The FAO food price index, which monitors prices of five food baskets: cereals, meat, dairy products, vegetable oils and sugar, rose 2% in October, mainly due to a rise in vegetable oil prices.

From January to October, the vegetable oils category saw the largest price increase, rising 24% due to higher prices for palm, soybean, sunflower and rapeseed oils. This was followed by the FAO milk category, which rose 17% year-to-date, led by cheese and butter prices. The gauge’s meat category is up 10% year-to-date.

In contrast, the grains category, which consists primarily of wheat and rice, fell 4.5%, while sugar fell nearly 5% year-on-year. Analysts agreed that supply-side factors ranging from weather to transportation challenges were the main drivers.

The index measures commodity prices rather than retail costs, but the rise suggests higher food prices could continue to impact consumers.

According to industry experts who spoke to CNBC, here are some key foods that could see further increases worldwide in the coming year.

Vegetable oil prices are expected to rise significantly next year, with palm oil in the spotlight as higher global demand meets supply constraints, said Cheang Kang Wei, a physical farming broker at financial services firm StoneX.

The recent El Niño weather phenomenon affected palm fruit cultivation in Indonesia, the largest palm oil producer and accounting for more than half of global supply, Fitch Solutions research unit BMI wrote in a report.

According to the country’s palm oil association, domestic production fell by almost 5% in the first eight months of 2024 compared to the same period last year.

“This is exacerbated by Indonesia’s push to use more palm oil for biodiesel production, further tightening supply,” Cheang told CNBC.

Other vegetable oils, such as rapeseed oil, could also become more expensive due to similar supply difficulties, broker StoneX added.

Beef prices have risen as a result of drought in the U.S. southern plains, causing the cattle herd to “decline sharply,” said Stephen Nicholson, a strategist at agricultural bank Rabobank.

Cattle operations that rely on rainfall to produce feed for their herds are vulnerable to drought. During dry periods, when forage production and livestock feed availability decline, producers often have to purchase additional feed or reduce the size of their herds – leading to higher costs.

The United States is the largest beef producer in the world and one of the largest exporters.

Feeder cattle futures traded on the Chicago Mercantile Exchange rose 16% year-to-date to $2.59 a pound, FactSet data showed. Feeder cattle are young cattle that are mature enough to be fattened for slaughter.

Both Rabobank and the UK’s Agriculture and Horticulture Development Board expect the overall decline in global beef production to keep prices high in 2025.

“Herd declines in the world’s four largest beef producing countries will result in the first global decline in beef supply since the Covid-19 pandemic,” Rabobank analysts wrote in a recent report.

The sugar, coffee and cocoa markets face greater price uncertainty than other commodities, said BMI commodities analyst Matthew Biggin.

While coffee and cocoa prices are not reflected in the FAO index, prices of the two commodities face the “greatest risk,” Biggin said. According to a BMI report, unfavorable weather in key coffee producer Brazil has led to optimistic market sentiment.

Coffee futures traded on ICE are up nearly 70% year-to-date to $3.18 a pound.

As for cocoa, concerns over heavy rains and poor bean quality in Ivory Coast, the largest producer, have also put upward pressure on cocoa prices. Difficult weather conditions and disease have affected production in West Africa, which accounts for about 70% of the world’s cocoa supply.

Although prices have eased slightly from record highs, cocoa futures are still above typical levels, trading at $9,425 a tonne on the US Intercontinental Exchange.

“The risk of upward momentum resurfacing in the next two to three months is high,” Citi analysts said, expecting cocoa prices to rise to $10,000 a tonne within the next three months.

Cocoa is a key ingredient in chocolate, and the prices of the popular treat have in turn had a negative impact.

One category that would be “severely impacted” by U.S. President-elect Trump’s proposed policies would be fruits and vegetables, said Bradley Rickard, a professor of food and agricultural economics at the Charles H. Dyson School of Applied Economics and Management.

“And this would be further complicated if other policy changes affected agricultural labor supply in the United States,” Rickard said.

Trump recently said he would impose an additional 10% tariff on goods from China and a 25% tariff on Canada and Mexico.

The USA in particular will be hit harder.

Mexico accounted for 69% of U.S. vegetable imports and 51% of U.S. fresh fruit imports in 2022, according to the latest data from the U.S. Department of Agriculture.

According to the University of California at Davis, Mexico is a major supplier of a range of products to the United States, including avocados, tomatoes, raspberries, peppers and strawberries.

“The foods where prices would increase the most are those that are not produced domestically,” Rickard added.

When Trump takes office in January, there could be a “renewed trade war” with China that could be very disruptive to agricultural trade, said Joseph Glauber, senior research fellow at the International Food Policy Research Institute.

Prices of soybeans, poultry and meat could be volatile if China retaliates, he added.