The United Nations Food and Agriculture Organization (FAO) has revealed that its world price index for food fell in February for the seventh consecutive month. The decline was attributed to lower prices for major cereals, offsetting the increases in sugar and meat prices. The FAO’s price index tracks globally traded food commodities, providing insights into the trends in the international food market.
Key Points:
Seventh Consecutive Monthly Decline: The FAO’s world price index recorded a decline in February for the seventh straight month. The index averaged 117.3 points, down from a revised 118.2 points in the previous month. This marks the lowest reading since February 2021.
Cereal Prices Drive Decline: The cereal index, a component of the overall price index, fell by 5% month-on-month in February. The decline was primarily attributed to the expectation of large maize harvests in South America and competitive prices offered by Ukraine. The cereal index stood 22.3% below its level a year ago.
Vegetable Oil Prices Drop: Vegetable oil prices decreased by 1.3% in February compared to January, standing 11% below year-ago levels. The decline was driven by prospects for abundant supplies in South America. Prices of rapeseed and sunflower oil also fell due to ample exports.
Sugar Index Rises: In contrast to cereals and vegetable oil, the sugar index rose by 3.2% month-on-month in February. The increase was attributed to persistent concerns over the upcoming sugar output in Brazil, the world’s top sugar producer. Additionally, forecasted production declines in Thailand and India contributed to the rising sugar prices.
Cereal Supply and Demand Report: In a separate report on cereal supply and demand, the FAO increased its estimate for 2023 cereal output by 1.1% compared to the previous year. The total cereal output is now projected to be 2,840 million metric tons. The upward revision is attributed to increased maize supplies in Brazil, China, and the United States.
The FAO’s price index provides valuable insights into the dynamics of the global food market, reflecting the influence of factors such as crop yields, production forecasts, and geopolitical considerations.
