In March, global food prices experienced a rebound from a three-year low, driven by rises in vegetable oils, meat, and dairy products, as indicated by the most recent price index from the United Nations food agency.
The Food and Agriculture Organization’s (FAO) index, which monitors the most traded food commodities globally, stood at an average of 118.3 points in March, an increase from a revised 117.0 points recorded the preceding month, according to the agency.
The February figure represented the index’s lowest point since February 2021 and signified a decline for the seventh consecutive month.
Global food prices have plummeted significantly since reaching a record high in March 2022, coinciding with the commencement of Russia’s full-scale invasion of Ukraine, a fellow exporter of crops.
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The FAO reported that its most recent monthly reading was 7.7% lower compared to the same period last year.
In March, the FAO’s vegetable oil price index spearheaded gains, surging by 8% compared to the previous month, with notable increases observed across all major oils.
For the sixth straight month, the dairy index rose by 2.9%, mostly due to rising cheese and butter costs. In the meantime, the price increases of beef, pig, and poultry were the reason behind the 1.7% increase in the FAO’s meat index.
The increases in vegetable oils, dairy, and meat overshadowed declines in cereals, which dropped by 2.6% from February, as well as sugar, which experienced a 5.4% decrease.
According to the FAO, wheat experienced the most significant decline among cereals, driven by intense export competition and cancelled purchases by China. This decrease offset a minor increase in maize (corn) prices, partly attributed to logistical challenges in Ukraine.
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The decline in sugar prices was primarily attributed to an upward revision in expected production in India and a more favorable harvest pace in Thailand, according to the FAO.
In its separate report on cereal supply and demand, the FAO slightly revised up its forecast for global cereal production in 2023/24 to 2.841 billion metric tons from the 2.840 million projected last month, marking a 1.1% increase from the previous season.
Looking ahead to upcoming crops, the agency adjusted its forecast for global wheat output in 2024, reducing it to 796 million tons from 797 million tons projected last month. This adjustment reflects diminished expectations for crops in the European Union and the UK, influenced by rain-affected sowing and dry conditions in certain regions.
The FAO noted an anticipated decrease in global maize production, though the volume is expected to remain above the average of the past five years. However, the agency did not provide a precise forecast for maize production.
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