World food prices fall for 12th month in a row

Ample supplies, subdued demand contribute to drop

ROME:

The United Nations food agency’s world price index fell in March for a 12th consecutive month, and is now down 20.5% from a record high hit one year ago, following Russia’s invasion of Ukraine.

The Food and Agriculture Organisation’s (FAO) price index, which tracks the most globally traded food commodities, averaged 126.9 points last month against 129.7 for February, the agency said on Friday. It was the lowest reading since July 2021.

A combination of ample supplies, subdued import demand and the extension of a deal allowing the safe export of Ukrainian grain via the Black Sea contributed to the drop, FAO said.

The Rome-based agency said the decline in the index reflected lower prices for cereals, vegetable oils and dairy products, which offset rises in sugar and meat prices.

“While prices dropped at the global level, they are still very high and continue to increase in domestic markets, posing additional challenges to food security,” Maximo Torero, FAO’s Chief Economist, said in a statement.

“This is particularly so in net food importing developing countries, with the situation aggravated by the depreciation of their currencies against the US dollar or the euro and a mounting debt burden,” he added.

The FAO cereal price index fell 5.6% month-on-month in March, with wheat registering a 7.1% drop, maize a 4.6% decline and rice easing 3.2%.

Published in The Express Tribune, April 8^th, 2023.

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