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Global food prices dropped further in January: UN

GreenWatch Desk World News 2023-02-06, 11:15pm

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Global food prices dropped for the tenth consecutive month in January, the UN food agency said recently.

Price indices for vegetable oils, dairy and sugar drove the January decline, the Food and Agriculture Organization of the United Nations (FAO) said Friday.

The FAO Food Price Index fell 17.9 percent below its peak reached in March 2022 following Russia's full-scale invasion of Ukraine, reports UNB.

The downward pricing trend was helped in part by a pivotal agreement signed in July to unblock Ukraine grain exports amid the ongoing war.

Tracking monthly changes in the global prices of commonly traded food commodities, the latest index averaged 131.2 points in January, falling 0.8 percent since December.

The FAO reported small price decreases on its latest meat and sugar indices.

"Strong harvest progress in Thailand and favourable weather conditions in Brazil outweighed the impact on sugar prices due to concerns over lower crop yields in India, higher gasoline prices in Brazil, which support demand for ethanol, as well as the Brazilian real's appreciation against the US dollar," the UN agency said.

Also, vegetable oil prices fell 2.9 percent, stemming from subdued global import demand for palm and soy oils and ample export availability of sunflower seed and rapeseed oils. Cereal prices remained essentially unchanged since December.

International wheat prices fell for the third consecutive month. The 2.5 percent decrease relates to Australia and Russia outpacing production expectations. Meanwhile, slightly higher global maize prices were rooted in a strong demand for exports from Brazil and concerns over dry conditions in Argentina.

Cheese became slightly more expensive despite dairy prices averaging 1.4 percent lower than in December, which came after lighter demand from leading importers and increased supplies from New Zealand.

Currency movements drove the price increase alongside a recovery in food services and retail sales in Western Europe following the New Year holiday.

Global rice prices climbed 6.2 percent from December, triggered by tighter availability. Other factors included strong local demand in some Asian exporting countries and exchange rate movements.

In its latest Cereal Supply and Demand Brief, the FAO expects international trade in cereals in the 2022/23 period to decline by 1.7 percent from the previous year's record level to 474 million tons.

Early indications point to likely area expansions for winter wheat cropping in the northern hemisphere. However, higher costs may affect the amount of fertiliser that can be applied to crops, with adverse implications for yields.

Low domestic prices could result in a small cutback in wheat plantings in Russia, the world's largest exporter, while severe war-induced impacts in Ukraine are estimated to reduce winter wheat area plantings by 40 percent.

Record planting is forecast for India, spurred by high market and support prices, and relatively high planting is projected in Pakistan as standing water from the 2022 floods is causing less hindrance than initially anticipated.

In the southern hemisphere countries, most of the 2023 coarse grain crops have been sown. Brazil may post record maize plantings, while those in Argentina could decrease due to low soil moisture levels and weather conditions augur well for maize yield prospects in South Africa, the FAO said.