Price indices for vegetable oils, dairy and sugar fueled the decline in January, the UN food agency said, releasing two new reports on food production expectations.
The FAO Food Price Index fell 17.9 percent below its all-time highreached in March 2022 after Russia’s massive invasion of Ukraine.
The downward trend in prices was partially supported by a central agreement signed in July to unblock Ukraine’s grain exports amid the ongoing war.
The latest index, which tracks monthly changes in global prices of commonly traded food commodities, averaged 131.2 points in January and is down 0.8 percent since December. The FAO reported small price cuts in the latest meat and sugar indices.
“Strong crop progress in Thailand and favorable weather conditions in Brazil outweighed the impact on sugar prices from concerns about lower crop yields in India, higher gasoline prices in Brazil supporting demand for ethanol, and the appreciation of the Brazilian real against the United States dollar “, says the report.
Simultaneously, Vegetable oil prices fell 2.9 percent, reflecting subdued global import demand for palm and soybean oils and large export availability of sunflower and canola oils. Grain prices have remained essentially unchanged since December.
Wheat production increases
International Wheat prices fell for the third straight month. The 2.5 percent drop comes as Australia and Russia beat production expectations. Meanwhile, slightly higher global corn prices were driven by strong demand for exports from Brazil and drought concerns in Argentina.
Holiday Cheese Boost
Cheese was slightly more expensive, although milk prices were on average 1.4 percent lower than in December, due to lower demand from leading importers and increased shipments from New Zealand. Currency moves drove price increases along with a rebound in hospitality and retail sales in Western Europe after the New Year holiday.
Global Rice prices climbed 6.2 percent since December, triggered by tighter availability. Other factors included strong local demand in some Asian exporting countries and exchange rate movements.
New grain predictions
In his latest Grain supply and demand overviewFAO expected international grain trade will decrease by 1.7 percent in the period 2022/23 from the record level of the previous year to 474 million tons.
Early signs point to a likely area Extensions for winter wheat cultivation on the northern hemisphere. However, higher costs can affect the amount of fertilizer that can be applied to the plants, with adverse effects on returns.
Low domestic prices could lead to a small reduction in wheat cultivation in Russiathe world’s largest exporter while It is estimated that the severe war-related effects in Ukraine are reducing winter wheat plantings by 40 percent.
Record planting is forecast for Indiaspurred by high market and support prices, and relative High planting is projected in Pakistan as standing water from the The 2022 floods will cause less disruption than initially expected.
In countries in the southern hemisphere, most of the coarse grain crops planted in 2023 were sown. Brazil has record maize plantingswhile those in Argentina could decrease due to low soil moisture levels and Weather conditions bode well for corn yield prospects in South Africasays the report.
