The Food and Agriculture Organisation of the United Nations (FAO) released a report sharing that the global food price index rose for the first time in a year in April during rapid increases in worldwide ingredients such as sugar, meat, and rice.
The FAO Food Price Index tracks monthly changes in the prices of internationally common foods, averaging 127.2 points in April this year, up 0.6 percent from March. This price index is 19.7 percent lower than its level from April 2022. However still 5.2 percent higher than in April 2021.
Since March, the sugar price index has risen 17.6 percent, which is the highest it has been since October 2011. This is a consequence of reduced production expectations and outcomes in the most significant sugarcane producers globally due to dry weather conditions and slow uptake of sugarcane crop harvest in Brazil, coupled with higher crude oil prices, resulting in an increased demand for sugarcane-based ethanol.
Secondly, the meat price index has also risen by 1.3 percent as a result of higher pig meat quotations and increased poultry prices due to Asian import demand and production being stilted as a result of animal health issues. Bovine meat prices internationally have also significantly increased due to declining cattle supplies for slaughter, particularly in the U.S.A.
However, price indices for other typical food commodity categories, besides rice, have continued downward.
The cereal price index dipped 1.7 percent since March, and global maise prices decreased 3.2 percent as supplies in South America have seasonally grown with continued harvests. Vegetable oil prices decreased by 1.3 percent, while palm oil prices remained stable. However, soy, rapeseed, and sunflower oil declined due to Brazil's seasonal harvest pressures from the country's record soybean crop.
Contrarily, reduced rice yields caused by increased input costs and extreme weather conditions, particularly outside of Asia, has meant sales of rice to Asian buyers sustained a global increase in price.
"It is important that we continue to closely track the evolution of prices and the reasons for price increases. As economies recover from significant slowdowns, demand will increase, exerting upward pressure on food prices," said FAO Chief Economist Maximo Torero.
"At the same time, the increase in rice prices is extremely worrisome, and the Black Sea initiative must be renewed to avoid any other spikes in wheat and maise."
Furthermore, Dairy prices have dropped by 1.7 percent due to the continued lacking global import for milk powder, in contradiction with the increased cheese export availabilities in Western Europe.
Brazil and its crops, particularly maise, are estimated to reach record highs. On the flip side, Argentina's production is expected to decrease below average as dry conditions and heat waves continue to impact the country's farming capabilities.
Production forecasts for crops such as rice are difficult to pinpoint as the potential emergence of the El Niño phenomenon during the northern hemisphere summer is an event that will need close inspection.
