In March, the world price index of the United Nations food agency fell for the 12th consecutive month. It reached a 20.5% decline from the record high set one year ago after Russia’s invasion of Ukraine.
The agency, known as the Food and Agriculture Organization (FAO), tracks the global trade of food commodities. And reported that the index averaged 126.9 points last month, down from 129.7 in February.
This marks the lowest reading since July 2021. Initially, the February reading was reported as 129.8.
The decline in the index was caused by a combination of factors, including abundant supplies, weak import demand. And the continuation of an agreement allowing for safe export of Ukrainian grain via the Black Sea, according to the FAO.
The Rome-based agency stated that lower prices for cereals, vegetable oils, and dairy products offset increases in sugar and meat prices. This results in an overall drop in the index.
“While prices dropped at the global level, they are still very high and continue to increase in domestic markets. This will be posing additional challenges to food security,” Maximo Torero, FAO’s chief economist said in a statement.
“This is particularly so in net food-importing developing countries, with the situation aggravated by the depreciation of their currencies against the U.S. dollar or the euro and a mounting debt burden,” he added.
The FAO cereal price index fell 5.6 percent month-on-month in March, with wheat registering a 7.1 per cent drop, maize a 4.6 per cent decline, and rice easing 3.2 per cent.
Vegetable oils fell 3.0 per cent, some 47.7 per cent down on the level the index hit in March 2022. This was when the dairy index was down 0.8 per cent.
By contrast, sugar rose 1.5 per cent to its highest level since October 2016, hit by concerns over declining production prospects in India, Thailand, and China. The meat price index rose by 0.8 per cent. World food price fall is considered an alarming issue by all countries.