Downward slide in global food prices continues, says FAO
Vegetable oil prices fell 2.9 per cent, stemming from subdued global import demand for palm and soy oils and ample export availabilities of sunflower seed and rapeseed oils
Global food prices dropped for the tenth consecutive month in January, the Food and Agriculture Organisation of the United Nations (FAO) said on Friday.
Tracking monthly changes in the global prices of commonly traded food commodities, the latest index averaged 131.2 points in January, falling 0.8 per cent since December. 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 United States dollar,” the report stated.
At the same time, vegetable oil prices fell 2.9 percent, stemming from subdued global import demand for palm and soy oils and ample export availabilities 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 ater 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 per cent from December, triggered by tighter availabilities. Other factors included strong local demand in some Asian exporting countries and exchange rate movements.
In its latest Cereal Supply and Demand Brief, FAO expects international trade in cereals in the 2022/23 period to decline by 1.7 percent from the previous year’s record level of 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.
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 report stated.
A surge in the cost of most food commodities last year, as the disruption caused by Russia’s invasion of Ukraine raised concerns of shortages, sent the UN food agency’s average price index to the highest level on record.
The Food and Agriculture Organization’s (FAO) food price index, which tracks international prices of the most globally traded food commodities, averaged 143.7 points in 2022, up 14.3% from 2021, and the highest since records started in 1990, the agency said recently.
The index had already gained 28% in 2021 from the previous year as the world economy recovered from the impact of the pandemic.
Food prices surged ater Russia’s invasion of Ukraine in February last year on fears of disruptions to Black Sea trade. They have pared some of their gains since, in part because of a Un-backed grain export channel from Ukraine and the prospect of improved supplies in producing countries.
In December the benchmark index fell for the ninth consecutive month to 132.4 points, compared with a revised 135.00 points for November. The November figure was previously given as 135.7 points.
“Calmer food commodity prices are welcome ater two very volatile years,” FAO Chief Economist Maximo Torero said.
The decline in the index in December was driven by a drop in the international price of vegetable oils, together with some declines in cereal and meat prices, but mitigated by slight increases in those of sugar and dairy, the FAO said.
Nestle to hike food prices: Nestle will have to raise prices of its food products further this year to offset higher production costs that it has yet to fully pass on to consumers, Chief Executive Mark Schneider told a German newspaper.
The increases will not be as steep as they were in 2022, but “we have some catching up to do over the full year,” Schneider was quoted as telling Frankfurter Allgemeine Zeitung in an interview due for publication on Sunday.