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“It has now been more than two years since the COVID-19 pandemic continues to negatively impact our lives, health and economies,” FAO chief QU Dongyu said.
Explaining that the most needy “are most exposed to the pandemic and are the most affected by rising food and fuel prices”, he pointed out that the prices of basic foodstuffs such as wheat and vegetable oils have soared, “imposing extraordinary costs on global consumers, especially the poorest”.
Effects of war
The conflict has driven up international prices for wheat, corn and vegetable oils, while the war in the Black Sea region has caused shocks to markets that sell these commodities.
The FAO Food Price Index averaged 159.3 points in March, up 12.6% from February when it had already reached its highest level since its creation in 1990.
The index tracks monthly changes in the prices of a basket of commonly traded food products. Prices last month were 33.6% higher overall than in March last year.
Driven by soaring wheat and coarse grain prices – largely due to war in Ukraine – FAO The grain price index was 17.1% higher in March than it was a month earlier.
Over the past three years, Russia and Ukraine combined have accounted for about 30% and 20% of global wheat and corn exports, respectively.
The harvest is short
The recently published FAO Cereals Supply and Demand Information Bulletin estimates that at least 20% of Ukraine’s winter crops that have been sown cannot be harvested.
But, it also indicates a world cereal production of 2,799 million tons, slightly up from 2020, with rice production hits record high of 520.3 million tons.
And global cereal use in 2021-22 is forecast to reach 2,789 million tonnes, including a record high for rice, with increases also expected for maize and wheat.
Global cereal stocks are expected to increase by 2.4% by the end of this year, compared to their opening levels, largely due to higher wheat and maize stocks in Russia and Ukraine. , due to lower expected exports.
The FAO lowered its forecast for world cereal trade for the current marketing year to 469 million tonnes, marking a contraction from the 2020-21 level, mainly due to the war in Ukraine and based on information currently available.
Expectations indicate that the European Union and India will increase their wheat exports, while Argentina, India and the United States will likely ship more corn, partially offsetting the region’s loss of exports. the black Sea.
Oil and sugar
FAO The vegetable oil price index increased by 23.2%driven by higher quotations for sunflower oil, of which Ukraine is the world’s largest exporter.
Palm, soybean and rapeseed oil prices also rose sharply due to higher sunflower oil prices and rising crude oil prices – with soybean oil prices still supported by concerns over reduced South American exports.
from FAO Sugar price index up 6.7% from Februaryreversing recent declines to a level more than 20% higher than March 2021.
Higher crude oil prices were a driving factor, along with the appreciation of the Brazilian real, while favorable production prospects in India prevented larger monthly price increases.
Meat and dairy products
At the same time, soaring pork prices linked to a shortage of slaughter animals in Western Europe prompted the FAO Meat price index up 4.8% in March to reach a record level.
International poultry prices have also strengthened as supplies from major exporting countries have been reduced following outbreaks of avian flu.
Against a backdrop of increasing import demand for short- and long-term deliveries, particularly from Asian markets, prices of butter and milk powders rose sharply, pushing the FAO Dairy Price Index up 2.6 percenti.e. 23.6% more than in March 2021.
