Slight drop in food prices in April “a welcome relief” — Global Issues

The FAO Food Price Index averaged 158.2 points in April, down 0.8% from March’s surge, but remained nearly 30% higher than in March. April 2021.

The index tracks monthly changes in the international prices of a basket of food products, and the decline was driven by a slight decline in the prices of vegetable oils and cereals.

The most vulnerable still in danger

“The slight decline in the index is a welcome relief, especially for low-income, food-deficit countries, but food prices remain close to recent highsreflecting continued market tensions and posing a challenge to global food security for the most vulnerable,” said Máximo Torero Cullen, FAO Chief Economist.

The Vegetable Oil Price Index fell 5.7% in April, losing almost a third of March’s increase.

Rationing of demand has depressed prices of palm, sunflower and soybean oils, FAO said, while uncertainties surrounding export availabilities from Indonesia – the world’s largest exporter of palm oil – contained further price declines on the international market.

Impact of the war in Ukraine

The FAO Cereal Price Index fell 0.7 points in April, due to a 3.0 percent drop in world maize prices.

Wheat prices rose 0.2%, strongly affected by the continued blockade of ports in Ukraine. The country, together with Russia, accounts for around 30% of world wheat exports.

Other factors behind the increase include concerns over crop conditions in the United States, although tempered by larger shipments from India and higher than expected exports from Russia.

At the same time, international rice prices increased by 2.3 percent, supported by strong demand from China and the Near East.

The FAO has also released updated forecasts for global cereal supply and demand, which indicate that although stocks are rising, trade is expected to decline this year.

World wheat production is expected to reach 782 million tonnes, which incorporates an expected 20% decline in harvested area in Ukraine as well as drought-related declines in Morocco.

Record record for meat

The FAO said the sugar price index rose 3.3% in April, mainly due to higher ethanol prices and concerns over the slow start to the 2022 harvest in Brazil, the most world’s largest sugar exporter.

The FAO Meat Price Index hit a new record high last month, rising 2.2 percent as poultry, pork and beef prices rose. Poultry costs were impacted by disruptions to exports from Ukraine and increasing outbreaks of avian flu in the northern hemisphere.

The dairy price index also jumped 0.9%, driven by what the FAO described as “persistent global supply tightness”, as milk production in Western Europe and Oceania continued to be below seasonal levels.

The agency said world butter prices rose the most, influenced by growing demand associated with the current shortage of sunflower oil and margarine.

Leave a Comment