The United Nations Food Agency’s world price index fell in March for the twelfth consecutive month and is now 20.5% below the record reached a year ago after the Russian invasion of Ukraine.
The price index of the Food and Agriculture Organization of the United Nations (FAO), which tracks the most traded food products worldwide, registered an average of 126.9 points last month. , compared to 129.7 in February, the agency reported on Friday. It was the lowest reading since July 2021.
A combination of abundant supplies, subdued import demand and the extension of an agreement allowing the safe export of Ukrainian grain through the Black Sea contributed to the decline, according to the FAO.
The Rome-based agency said the decline in the index reflected lower prices for grains, vegetable oils and dairy products, which offset increases in sugar and meat.
“Although prices fell globally, they remain very high and continue to rise in domestic markets, posing additional challenges to food security,” said Máximo Torero, FAO’s chief economist, in a statement.
“This is particularly true in developing countries that are net food importers, with a situation exacerbated by the depreciation of their currencies against the US dollar or the euro and a growing debt burden,” he added.
The FAO Cereal Price Index fell 5.6%m/m in March, with wheat declining 7.1%, maize 4.6% and rice 3.2%.
Vegetable oils fell 3.0%, 47.7% less than the level reached by the index in March 2022, while the dairy index fell 0.8%.
By contrast, sugar rose 1.5% to its highest level since October 2016, weighed down by concerns about declining production prospects in India, Thailand and China. The meat price index rose 0.8%.
In a separate report on cereal supply and demand, the FAO raised its forecast for world wheat production in 2023, now set at 786 million tonnes, 1.3% below the 2022 level, but nonetheless the second highest recorded result.
“Near record planted area is expected in Asia, while dry conditions affect North Africa and southern Europe,” the FAO said.
The FAO also raised its forecast for world cereal production in 2022 to 2.777 million tons, only 1.2% less than the previous year. World rice production in 2022/23 is estimated at 516 million tonnes, 1.6% below the record 2021/22 crop.
World cereal utilization in the 2022/23 period stood at 2,779 million tons, 0.7% less than in 2021/22, according to the FAO. World cereal stocks at the end of the 2022/2023 seasons are expected to fall by 0.3% compared to their initial levels, to 850 million tons.