World food prices fall for 11th straight month in February, says FAO

World food prices fall for 11th straight month in February, says FAO

The United Nations agency’s world food price index fell in February for the 11th consecutive month, now down 19% from the record hit last March after Russia’s invasion of Ukraine.

The Food and Agriculture Organization (FAO) price index, which tracks the most traded food commodities globally, averaged 129.8 points last month, up from 130.6 in January, the agency said on Friday. That was the lowest reading since September 2021.

According to the monthly update, the decline in the index reflected lower prices for vegetable oils and dairy products, which more than offset a sharp rise in sugar prices.

In February, the FAO Cereal Price Index fell by 0.1% from the previous month, with a marginal increase in wheat prices more than offset by lower rice prices.

Vegetable oils fell 3.2% and dairy 2.7%, while sugar rose 6.9% to a six-year high, mainly due to a downward revision of production in India.

Low wheat production

In a separate report on cereal supply and demand, FAO issued a first preliminary forecast for global wheat production in 2023, seeing an annual decline to 784 million tonnes, although the crop is still the second-largest on record.

“In Ukraine, severe financial constraints, infrastructure damage and obstructed access to fields in parts of the country resulted in an estimated 40% annual reduction in 2023 winter wheat area, and well below average wheat production is expected in 2023,” said the FAO.

The drop was partially offset by an expected rise in US production to 51m tonnes, with high prices leading to an increase in wheat sowing to the highest level since 2015.

The FAO raised its forecast for world cereal production in 2022 by 9 million tonnes to 2.77 billion tonnes, although the volume still represents a 1.3% drop from the previous year.

The report said most of the upward revision is related to rice, with a better outlook for production in India.

Source: CNN Brasil