Globalfoodpriceindexhits all-time high in February

In the month under review, dairy price index averaged 6.4 percent higher, supported by lowerthan-expected milk supplies in Western Europe and Oceania, as well as persistent import demand, especially from North Asia and the Middle East.

The FAO Cereal Price Index was up three percent from January, led by rising quotations for coarse grains. Corn prices rose 5.1 percent, underpinned by crop condition concerns in South America, the uncertainty surrounding exports from Ukraine and rising wheat export prices.

Concerns about trade flows from the Black Sea region also raised world wheat prices by 2.1 percent, the FAO said.

Supported by strong global import demand, the meat price index rose 1.1 percent. The FAO also listed tight supplies of slaughter-ready cattle in Brazil and a high demand for herd rebuilding in Australia as contributory factors.

On the contrary, the FAO sugar price index declined by nearly two percent amid favourable production prospects in India, Thailand and other major exporters, as well as improved growing conditions in Brazil.

FAO revised cereal production outlook for 2022

FAO also published a forecast that shows worldwide cereal output is on course to increase to 790 million tonnes this year.

Anticipated high yields and extensive planting in North America and Asia are expected to offset a likely slight decrease in the European Union and the adverse impact of drought conditions on crops in some of the North African countries.

The agency also updated its forecast for world cereal production in 2021, which is now pegged at 2,796 million tonnes, a 0.7 percent increase from the year before.

The forecast for world trade in cereals was also raised to 484 million tonnes, up nearly one percent from the 2020/2021 level.

FAO said the forecast does not assume potential impacts from the conflict in Ukraine as it is closely monitoring the developments which will be assessed and reported in due course.

In his assessment on how the crisis in Ukraine could impact global food security, Gilbert Houngbo, president of the International Fund for Agricultural Development (IFAD), warned that a prolonged conflict could limit the world’s supply of staple crops like wheat, corn and sunflower oil, resulting in skyrocketing food prices and hunger.

According to Houngbo, the Black Sea area plays a major role in the global food system, exporting at least 12 percent of the food calories traded in the world.

“Forty percent of wheat and corn exports from Ukraine go to the Middle East and Africa, which are already grappling with hunger issues, and where further food shortages or price increases could stoke social unrest,” he stated.