FAO: Global food prices up for the first time in a year

The World Price Index of the Food and Agriculture Organization (FAO) rose in April for the first time in a year.

According to Reuters, the organization said today, Friday, that the index, which measures the prices of the most traded food commodities globally, reached an average of 127.2 points last month, compared to 126.5 in March. The reading for the month of March was initially at 126.9 points.

The Rome-based agency added that the rise in April reflected an increase in the prices of sugar, meat and rice, which offset the impact of declines in the prices of cereals, dairy and vegetable oils.

“As economies recover from a significant slowdown, demand will increase, leading to increased pressure on food prices,” said Maximo Torero, chief economist at FAO.

The sugar price index rose 17.6 percent compared to March, its highest level since October 2011. The organization said that this rise was linked to fears of shrinking supplies after downward revisions to production forecasts in India and China, as well as lower-than-expected production in Thailand and the European Union.

While the meat index rose 1.3 percent on a monthly basis, dairy prices fell 1.7 percent, vegetable oils 1.3 percent, and cereals 1.7 percent. The decline in world prices for all major grains outweighed the rise in rice prices. ..

“The increase in rice prices is very worrying and it is necessary to renew the Black Sea initiative to avoid any further hikes in wheat and corn,” Torero said, referring to the Ukrainian grain export agreement.

In a separate report on cereal supply and demand, FAO expected global wheat production in 2023 to reach about 785 million tons, slightly below 2022 levels, yet it represents the second largest production ever.

The FAO also raised its estimate for global cereal production for the year 2022 to 2.785 billion tons from a previous estimate of 2.777 billion, down 1 percent from the previous year.

The Organization estimated that global cereal consumption in 2022-2023 will reach 2.780 billion tons, down 0.7 percent from 2021-2022. Global grain stocks are expected to decline by the end of the 2022-2023 season by 0.2 percent from their levels at the beginning of the season, to 855 million tons.