Despite this sharp decline, world food prices remain “very high”, according to the FAO.
World food prices, although still “very high”, are down for the twelfth consecutive month, down 20.5% in March 2023 compared to the same month of 2022 when the markets were showing the first effects of the war in Ukraine, the FAO announced on Friday.
“Abundant supplies, weak import demand and the extension of the Black Sea Grains Initiative (the maritime grain corridor allowing exports from Ukraine, editor’s note) contributed to this decline” , says the Food and Agriculture Organization of the United Nations (FAO).
Over one month, the FAO food price index, which tracks the change in international prices of a basket of commodities, fell 2.1% from its February level. It fell by 20.5% “compared to its record level of March 2022”. The decline in cereal prices (-5.6% over one month) and vegetable oils (-3%) offset the rise in sugar (+1.5%), which is at “its highest level since October 2016, reflecting concerns regarding declining production prospects in India, Thailand and China.
Prices “remain very high”
The price of wheat, a bread cereal, fell by 7%, “under the effect of strong production in Australia, the improvement in the state of crops in the European Union, the importance of availabilities in Russia and Ukraine’s continued exports from its Black Sea ports”. World maize prices fell 4.6%, partly on “expectations of a record crop in Brazil”, and those of rice by 3.2% due to “ongoing or imminent harvests in the main exporting countries, including India, Vietnam and Thailand”.
Vegetable oil prices fell 47.7% year-on-year as “abundant global supplies and weak global import demand drove down quotations for soybean, rapeseed and sunflower”. This “more than offset higher palm oil prices”, which rose due to lower production levels in Southeast Asia due to flooding and temporary export restrictions imposed by the ‘Indonesia.
“While prices have fallen globally, they remain very high and continue to rise in domestic markets, which poses additional problems in terms of food security”, tempered Máximo Torero, chief economist of the FAO.