World food commodity prices declined for the 12th month in a row in March, bringing about a drop in the international food price index, the Food and Agricultural Organisation of the United Nations (FAO) has reported.
The FAO’s food price index declined by 2.1% between February and March of this year, averaging 126.9 points last month.
This represents a significant decrease of 20.5% on March 2022, when the food price index reached its peak, shortly after the Russian invasion of Ukraine.
According to the FAO, a mixture of ample food supplies, subdued import demand and the extension of the Black Sea Grain Initiative have contibuted to this recent drop, which saw the FAO cereal price, vegetable oil price and dairy price indices decrease.
FAO grain, oil and dairy price indices
Between February and March of this year, the FAO’s cereal price index declined by 5.6%, with international wheat prices coming down by 7.1%.
According to the organisation, this can be attributed to a mix of strong output in Australia, improved crop conditions in the EU and high supplies from both the Russian Federation and Ukraine.
World maize prices fell by 4.6%, although this was partially due to a record harvest in Brazil, while rice prices eased by 3.2% thanks to ongoing harvests in the major exporting countries such as India, Vietnam and Thailand.
The vegetable oil price index averaged 3% lower than the previous month and was 47.,7% lower than it was in March of the previous year. Strong supplies contributed to lower soy, rapeseed and sunflower oil prices which offset the higher palm oil prices that resulted from trade restrictions in Asia.
The FAO’s dairy price index saw a smaller decline between February and March, of just 0.8%. As strong import demand pushed up butter prices, cheese prices dipped due to slower purchases among leading importers in Asia.
FAO sugar and meat price indices
Meanwhile, both the sugar and meat price indices experienced an increase over the one month period earlier this year.
The former rose by 1.5% to its highest level since October 2016, which the FAO stated reflected the ongoing concerns over declining production prospects in India, Thailand and China.
However, the organisation said that there was a positive outlook for the sugarcane crops which are about to be harvested in Brazil, which has limited the upward pressure on prices.
The FAO’s meat price index also experienced an increase, albeit slightly lower. It rose by 0.5% as rising bovine meat prices in the US, which were based on expectations of short supplies, pushed up the international average.
World pigmeat prices also rose due to increased demand in Europe, and despite the bird flu crisis in many EU countries, world poultry meat prices fell for the ninth conscutive month.