Thursday, March 23, 2023

Food prices fall for the eleventh consecutive month

The reference index for international prices of food raw materials decreased in February for the eleventh consecutive month, although only 0.6%, the Food and Agriculture Organization of the United Nations (FAO) reported this Friday.

The FAO Food Price Index stood at 129.8 in February, a marginal 0.6% decline from January, but 18.7% less than its March 2022 peak.

While the FAO Cereal Price Index was virtually unchanged from January and the Vegetable Oil Index was down 3.2% from January.

On the other hand, the dairy price index decreased by 2.7% during the month, with international quotations for butter and skimmed milk powder registering the steepest drop.

The meat price index was also almost unchanged from January and the sugar index rose 6.9% from January to its highest level in six years, due in large part to a downward revision to the production forecast for 2022-2023 in India, as well as the reduction in international prices of crude oil and ethanol in Brazil.

In its latest Cereal Supply and Demand Report, also released today, FAO published its preliminary forecast for world wheat production in 2023 at 784 million tonnes, which would be the second highest on record, albeit below the last year.

Strong outputs are expected in North America as farmers increase acreage in response to high grain prices.

The FAO has also revised upwards its projection for world cereal production in 2022 to 2,774 million tons, still 1.3% less than in 2021.

Despite the fact that the FAO Food Price Index has declined somewhat in recent months, national food price inflation is at prohibitive levels in many countries. For example, coarse grain prices in Ghana in January were 150% higher than the previous year, and grain prices reached record highs in Malawi and Zambia.


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