Rome, May 5, 2023 – In April, for the first time in a year, the international index of food prices rose again, as the price of sugar, meat and rice rose – the Food and Agriculture Organization of the UN (FAO) announced.
The FAO food price index rose after the price of sugar, meat and rice rose, while the prices of wheat, corn, dairy products and vegetable oils fell. Sugar repository in Brazil. ©FAO/Giuseppe Bizarri
The FAO food price index rose after the price of sugar, meat and rice rose, while the prices of wheat, corn, dairy products and vegetable oils fell
The FAO food price index , which tracks monthly price changes in the global markets of the most important food commodities, rose 0.6% since March and closed with an average of 127.2 points.
With this, it was 19.7% below its April 2022 value and 5.2% above two years ago.
The FAO sugar price index jumped by 17.6% since March, reaching a level not seen since October 2011. The move is due to reduced production expectations and results due to dry weather in India, China, Thailand and the European Union, as well as initial difficulties in sugarcane harvesting in Brazil and rising crude oil prices in international markets, which increased demand for sugarcane-based bioethanol.
The meat price index increased by an average of 1.3% in the month, mainly due to higher quotations for pork and poultry meat, the latter fueled by import demand and production in the Asian market, in addition to animal health problems. Beef prices have also increased globally due to a decline in the number of animals ripe for slaughter, particularly in the United States.
Meanwhile, prices for other food commodity categories – with the exception of rice – continued to decrease.
Cereal prices fell by 1.7% compared to March, 19.8% below the level of a year ago. The price of wheat on the global markets was 2.3% lower, mainly due to the abundant export stocks in Australia and Russia. Corn prices fell by 3.2% due to a seasonal increase in South American inventories. On the other hand, higher costs and a smaller harvest due to unfavorable weather (mostly outside Asia) and purchases by Asian buyers kept the international price of rice high.
“It is important to continue to monitor the development of prices and the reasons for the increase. As economies recover from the recession, demand is increasing, putting demand pressure on food prices,” said FAO Chief Economist Maximo Torero. “In addition, the rise in the price of rice is a serious concern and the renewal of the Black Sea initiative is of prime importance in order to avoid another spike in the price of wheat and corn,” he added.
After four months of decline, the vegetable oil price index shrank by a further 1.3% in April. Palm oil prices remained stable, but soybean, rapeseed and sunflower oil prices declined due to the seasonal effect of a potentially record-breaking soybean crop in Brazil.
The price of dairy products decreased by an average of 1.7% globally due to the persistently weak global demand for milk powder and the abundant availability of cheese in Western European markets.
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Updated production and trade forecasts
The new FAO Cereal Stocks and Demands Flash Report already provides corrected numbers for wheat production in 2023. Global output is expected to be 785 million tonnes – the second-highest on record – but will be slightly below last year due in part to Australia and Russia falling short of record 2022 output.
In the case of corn, a record amount is expected in Brazil, while Argentina’s output will be lower than average due to persistent drought and heat waves. Favorable weather has brought good production prospects in South Africa, where near-record harvests are expected.
Meanwhile, rice production forecasts for 2023-24 are more mixed along and south of the equator due to the impact of La Niña. Looking to the future, it is worth paying attention to the El Niño phenomenon and its possible summer effects in the Northern Hemisphere.
The FAO raised its previous forecast for grain trade in 2022-23 to 472 million tonnes, just 2.2% below last season’s record high. Wheat trade may expand by up to 2.3%, grain crops by 5.5%. Global trade in rice is expected to shrink by 4.4% in 2023.
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Source: FAO