FAO Food Price Index falls for 11th consecutive month

Rome. The benchmark international food price index fell in February for the 11th consecutive month, albeit only slightly, the Food and Agriculture Organization of the United Nations (FAO) reported today.

The FAO Food Price Index averaged 129.8 points in February, i.e. slightly down (0.6%) from January, but 18.7% below the peak which it reached in March 2022. The decrease in the index, which shows the monthly variation in international prices of the most traded food products, reflected falls in the prices of vegetable oils and dairy products that more than offset a sharp increase in prices. sugar prices.

The FAO Cereal Price Index was broadly the same as in January. International wheat prices increased slightly during the month, as concerns about dry conditions in the United States of America and robust demand for supplies from Australia were largely offset by strong competition among exporters. International rice prices declined 0.1% due to slower trade activities in most major Asian exporting countries, whose currencies also depreciated against the US dollar.

The FAO Vegetable Oil Price Index fell 3.2 percent compared to January, and world prices for palm, soybean, sunflower and rapeseed oils also fell.

The FAO Dairy Price Index fell 2.7 percent over the month, with international quotations for butter and skimmed milk powder recording the sharpest declines.

The FAO Meat Price Index was also almost unchanged from January. World poultry meat prices continued to decline amid ample export supplies, despite outbreaks of bird flu in several major producing countries, while pork prices rose, mainly due to concerns regarding the scarcity of exportable supplies in Europe.

By contrast, the FAO Sugar Price Index increased by 6.9 percent compared to January, reaching its highest level in six years, mainly due to the downward revision of the production forecast for 2022-23 in India, as well as the decrease in international prices of crude oil and ethanol in Brazil.

Early production prospects for the 2023 wheat crops

In its cereal supply and demand briefing note , also released on Friday, FAO released its initial forecast for world wheat production in 2023, predicting a resulting global output of 784 million tonnes, which would be the second highest harvest on record, although lower than the previous year. A bumper crop is expected in North America as farmers have increased acreage in response to high grain prices.

In the countries of the southern hemisphere, production prospects for the 2023 coarse grain crops are generally favourable, and aggregate maize plantings in Brazil are anticipated to increase to a record level.

The FAO has also revised upwards its forecast for world cereal production in 2022 to 2,774 million tonnes, a value that is still 1.3% lower than in 2021.

World cereal utilization in 2022-23 is forecast to be 2.78 billion tonnes, down 0.6 percent from the previous season, largely due to an anticipated contraction of the utilization of all major coarse grains.

FAO forecasts world grain stocks ending in 2023 to decline by 1.2 percent from their opening levels, a reduction to 844 million tonnes, as forecast declines in stocks are expected to decline. stocks of coarse grains and, to a lesser extent, rice offset an expected build in wheat stocks. According to the new projections, the global cereal reserves-to-utilization ratio would remain at 29.5 percent, which is considered a “generally comfortable level”.

Grain trade is forecast to contract by 1.8% to 473 million tonnes.

Crop prospects and food situation

Droughts, conflicts and high prices, along with macroeconomic problems, are exacerbating food insecurity in many countries. The assessments carried out confirm that a total of 45 countries around the world are in need of external food assistance, according to the latest report Crop Prospects and Food Situation , a quarterly publication of the Global Information and Early Warning System on Food and Agriculture (GIEWS) of FAO, also published today.

Some people in six countries are experiencing, or are expected to soon experience, elevated levels of acute food insecurity, defined as Integrated Food Security Phase Classification (IPC) Phase 5, or catastrophic hunger: Burkina Faso, Haiti, Mali, Nigeria, Somalia and South Sudan. Millions more face severe hunger, according to the report.

Although the FAO Food Price Index has declined slightly in recent months, domestic food price inflation is at extremely high levels in many countries. For example, coarse grain prices in Ghana in January were 150 percent higher than a year earlier, and grain prices were at record highs in Malawi and Zambia. According to the report, the total increase in cereal production in the 47 low-income, food-deficit countries(LIFDC) in the current crop season has helped mitigate the impact of rising world prices for staple foods, but declines in production and weak currencies in many others will keep the cost of food imports down of LIFDCs at high levels.

In the report Crop Prospects and Food Situation , offers more insights from around the world, highlighting the alarming situation in East Africa, which is experiencing the worst drought in 40 years.

Source: Food and Agriculture Organization of the United Nations