Global food prices ease slightly in April, says UNFAO

BY ONOME AMUGE

Global food commodity prices edged a little lower in April after soaring to an all-time high the previous month, led by a sharp decline in corn and vegetable oil prices, even as the world market continued to grapple with the impact of the ongoing war in Ukraine.

This is contained in the recently released United Nations Food and Agriculture Organisation (FAO) food price index, which tracks monthly changes in the international prices of a basket of food commodities.

The FAO food price index averaged 158.2 points in the fourth month of the year, down 0.8 percent from the 13 percent surge in March. It however stayed nearly 30 percent compared to a year earlier.

Máximo Torero Cullen, FAO chief economist, described the small decrease in the index as a welcome relief, particularly for low-income, food-deficit countries.

Cullen, however, noted that inflation worries are not yet over as food prices remain close to their recent highs, reflecting persistent market tightness and posing a challenge to global food security for the most vulnerable.

“The drop in April was led by a significant downturn in the vegetable oil sub-index, along with a slight decline in the cereal price sub-index.”

Demand rationing pushed down the prices for palm, sunflower, and soy oils, FAO said, while uncertainties surrounding export availability from Indonesia – the world’s leading exporter of palm oil – contained further declines in prices on the international market.

The index for vegetable oils was 5.7 percent lower in April, losing a third of its March increase. According to the FAO, demand rationing pushed down prices for palm, sunflower and soy oils, while uncertainties surrounding export availability from Indonesia, the world’s leading palm oil exporter prevented steeper declines in prices in the international market.

In a similar motion, world sunflower and soy oil prices fell month-on-month, largely tied to demand-rationing following the record high prices seen lately.

By contrast, rapeseed oil prices stayed firm in the month, supported by lingering global supply tightness.

Meanwhile, FAO’s grain price index shed 0.7 points in April, driven by a three percent decline in corn prices.

Wheat prices rose 0.2 percent, reflecting Russia’s continued blockade of ports in Ukraine, with both countries accounting for an estimated 30 percent of global wheat exports. Other factors behind the increase included concerns over crop conditions in the United States, though moderated by larger shipments from India and higher-than-expected exports from Russia.

Despite an expected 20 percent decline in Ukraine’s harvested acreage, as well as the impact of a drought in Morocco, FAO maintained its projection that global wheat production would grow in 2022 to 782 million tonnes.

International rice prices rose 2.3 percent, underpinned by strong demand from China and the Near East.

World sorghum prices shed 0.4 percent month-on-month, while tight supplies bolstered barley prices by 2.5 percent.

Meat prices increased by 2.2 percent in April, with the FAO’s meat index soaring to a record high, reflecting higher prices for poultry due to the avian flu outbreak in the northern hemisphere and the war in Ukraine. Beef and pork prices also hit a record high, according to the FAO.

Dairy prices rose 0.9 percent in the month under review, driven by persistent global supply tightness as milk supply in Western Europe and Oceania dwindled below seasonal levels, the agency reported.

Sugar was up 3.3 percent, bolstered by higher prices for fuel ethanol in Brazil, the world’s largest exporter. The report further noted that “larger-than-previously anticipated” availability in India, another major sugar exporter, supported the global supply outlook of the sweet commodity, curbing further price increases.