FAO: Global food prices rose in April — first time in a year

The Food and Agriculture Organization (FAO) of the United Nations says world food prices rose in April for the first time in a year.

The UN agency said its food price index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 127.2 points in April 2023, up 0.6 percent from March.

FAO, however, said the index was 19.7 percent below its level in April 2022, but still 5.2 percent higher than in April 2021.

In the report released on Friday, the agency said the increase in the food price index was driven by higher international quotations for sugar, meat and rice, which offset a decline in prices of wheat, maize, dairy products and vegetable.

FAO said the sugar price index rose 17.6 percent from March, reaching its highest level since October 2011, due to reduced productions expectations and outcomes in India, China, Thailand and the European Union.

Similarly, the meat price index rose 1.3 percent in April, driven primarily by higher pig meat quotations, followed by poultry prices, which increased amid Asian import demand and production curbs spurred by animal health issues.

The agency said price indices for other major food commodity categories, with the exception of rice, continued their declining trend.

“The FAO Cereal Price Index dipped 1.7 percent from March and averaged 19.8 percent below its April 2022 value. International wheat prices declined by 2.3 percent, due mostly to large exportable availabilities in Australia and the Russian Federation,” the report reads.

“World maize prices fell 3.2 percent as supplies in South America seasonally increased with ongoing harvests.

“On the other hand, against a backdrop of reduced harvests caused by higher input costs and adverse weather, especially outside of Asia, sales to Asian buyers sustained an increase in international rice prices.

“The FAO Vegetable Oil Price Index declined by 1.3 percent in the month, registering its fifth consecutive monthly decline. World palm oil prices were stable, while quotations for soy, rapeseed and sunflower oils declined in step with seasonal harvest pressure from a potentially record soybean crop in Brazil.

“The FAO Dairy Price Index dropped by 1.7 percent, impacted by the persistent slack global import demand for milk powders and higher cheese export availabilities in Western Europe.”

Commenting on the development, Maximo Torero, FAO chief economist, said it was important to closely track the evolution of prices and the reasons for increases in prices.

“As economies recover from significant slowdowns, demand will increase, exerting upward pressure on food prices,” Torero said.

“At the same time, the increase in rice prices is extremely worrisome and it is essential that the Black Sea initiative is renewed to avoid any other spikes in wheat and maize.”