Global food prices decline

The Food and Agriculture Organisation of the United Nations says there has been a 12th consecutive decline in the cost of some commonly traded global food products.

In an April 7 release, the organisation reported the decline in the benchmark index of international food commodity prices in March.

However, the FAO’s chief economist Máximo Torero said while prices dropped at the global level, they were still very high and continued to increase in domestic markets which posed additional challenges to food security.

“This is particularly so in net food importing developing countries, with the situation aggravated by the depreciation of their currencies against the US dollar or the Euro and mounting debt burden,”he said.

The organisation said the constant decline was driven by declines in world quotations in cereals and vegetable oils.

The FAO’s Food Price Index tracks monthly changes in the international prices of commonly-traded food products and noted that it was down 2.1 per cent from February and 20.5 per cent below the peak level of March 2022.

“A mix of ample supplies, subdued import demand and the extension of the Black Sea Grain Initiative contributed to the drop,” the release said.

The Black Sea Grain Initiative is an agreement Russia and Ukraine made with Turkey and the United Nations to safely export grain from certain ports. The agreement was made during the Russian invasion of Ukraine.

It also said that Cereal Price Index declined by 5.6 per cent from February with international wheat prices falling by 7.1 per cent and this was, “pushed down by strong output in Australia, improved crop conditions in the European Union, high supplies from the Russian Federation and ongoing exports from Ukraine from its Black Sea ports.”

The release said world maize prices fell by 4.6 per cent due to expectations of a record harvest in Brazil and rice declined by 3.2 per cent due to ongoing or imminent harvests in major exporting countries like India, Vietnam and Thailand.

The Vegetable Oil Price Index was also three per cent lower than the previous month as “ample world supplies and subdued global import demand pushed down soy, rapeseed and sunflower oil quotations.”

This offset higher palm oil prices which rose because of lower output levels in Southeast Asia due to flooding and temporary export restrictions imposed by Indonesia, the release said.

There were also declines in the Dairy Price Index by 0.8 per cent in March. It said butter prices increased because of “solid import demand” while cheese dipped because of slower purchases by most leading importers in Asia as well as increased availabilities in leading exporters. The Sugar Price Index, however, saw an increase by 1.5 per cent from February to its highest level since October 2016 reflecting concerns over declining production prospects in India, Thailand and China. “The positive outlook for the sugar cane crops about to be harvested in Brazil limited the upward pressure on prices, as did the decline in international crude oil prices, which reduced demand for ethanol,” the release said.The Meat Price Index also rose slightly, by 0.5 per cent.

The release said international bovine meat quotations rose and this was influenced by rising internal prices in the US on expectations of lower supplies moving forward, while pig meat prices rose due to increased demand in Europe ahead of holidays.

“Despite avian influenza outbreaks in several large exporting countries, world poultry meat prices fell for the ninth consecutive month on subdued global import demand,” it added.