FAO: Global food prices increased by 13% in March — highest level ever

Food and Agriculture Organisation (FAO) of the United Nations says global food prices surged by 13 per cent in March, making a giant leap to the highest level ever.

In its monthly Food Price Index released on Friday, FAO said food prices averaged 159.3 points in March, up 12.6 per cent from February, when it had already reached its highest level since its inception in 1990.

The Index tracks monthly changes in the international prices of a basket of commonly-traded food commodities. 

The latest level of the index was 33.6 per cent higher than in March 2021, FAO said.

The latest increase reflects new all-time highs for vegetable oils, cereals, and meat sub-indices, while those of sugar and dairy products also rose significantly.

The report added that they were driven by large rises in wheat and all coarse grain prices largely as a result of the war in Ukraine. 

“The Russian Federation and Ukraine, combined, accounted for around 30 per cent and 20 per cent of global wheat and maize exports, respectively, over the past three years,” the report reads.

“World wheat prices soared by 19.7 per cent during the month, exacerbated by concerns over crop conditions in the United States of America. Meanwhile, maize prices posted a 19.1 per cent month-on-month increase, hitting a record high along with those of barley and sorghum.

“Contrasting trends across the various origins and qualities kept the March value of FAO’s Rice Price Index little changed from February, and thus still 10 per cent below its level of a year earlier.”

FAO said the expected loss of exports from the Black Sea region exacerbated the already tight global availability of wheat.

According to the report, vegetable oil prices rose by 23.2 per cent, driven by higher quotations for sunflower seed oil, of which Ukraine is the world’s leading exporter. Palm, soy, and rapeseed oil prices also rose markedly as a result of the higher sunflower seed oil prices and the rising crude oil prices, with soy oil prices further underpinned by concerns over reduced exports by South America.

FAO said prices of sugar also rose by 6.7 per cent from February, reversing recent declines to reach a level more than 20 per cent higher than in March 2021.

It further noted that higher crude oil prices were a driving factor, along with currency appreciation of the Brazilian Real, while favourable production prospects in India prevented larger monthly price increases.

“The meat price index increased by 4.8 per cent in March to reach an all-time high, led by surging pig meat prices related to a shortfall of slaughter pigs in Western Europe. International poultry prices also firmed in step with reduced supplies from leading exporting countries following avian flu outbreaks,” the report added.

For African countries like Nigeria, the effect of a surge in global food prices, especially wheat, had seen higher prices in the price of bread and noodles.

Last month, African Development Bank (AfDB) unveiled plans to raise $1 billion to boost wheat production in Africa to avert potential food shortages arising from the Russia-Ukraine war.