The world price of food rises for the first time in a year

The reference index for international prices of basic food products rose in April for the first time in a year, due to the increase in world prices for sugar, meat and rice, as reported today by the United Nations Food and Agriculture Organization. Agriculture and Food (FAO).

He Food Price Indexwhich monitors the monthly variations in the international prices of the most traded basic products, reached an average of 127.2 points in April, 0.6% more than in March.

The index was 19.7% below the level in April 2022, but still 5.2% higher than in April 2021.

Those who go up…

On the other hand, the index for sugar prices increased by 17.6% compared to March, reaching its highest level since October 2011, due to reduced production expectations and results in India, China, Thailand and the European Union caused by weather conditions dry seasons, as well as the slow start to the sugarcane harvest in Brazil, along with rising international crude oil prices, which may increase demand for sugarcane-based ethanol.

The index of meat prices rose 1.3% over the month, driven mainly by rising pork prices, followed by poultry prices, which rose amid Asian import demand and production restrictions spurred by animal health problems. International beef prices also increased due to decreased supplies of slaughter cattle, especially in the United States.

On the other hand, in a context of reduced harvests due to the increase in input costs and adverse weather conditions, especially outside Asia, sales to Asian buyers sustained a rising international rice prices.

… and those who go down

Meanwhile, the price indices of other major categories of food productsthey kept their downward trend.

The index of grain prices it fell 1.7% compared to March and stood on average 19.8% below its value in April 2022. International wheat prices fell 2.3%, mainly due to the large exportable availabilities in Australia and Russia. World maize prices fell 3.2% as supplies in South America increased seasonally with the harvests underway.

“It is important that we continue to closely monitor price developments and the reasons for their rises. As economies recover from major downturns, demand will increase, putting upward pressure on food prices“, assured the chief economist of the Organization.

“At the same time, the rise in rice prices is extremely worrying and it is essential that the Black Sea initiative be renewed to avoid other spikes in wheat and corn,” added Máximo Torero.

The price index for vegetable oils it was down 1.3% on the month, posting its fifth straight monthly decline. World palm oil prices remained stable, while prices for soybean, rapeseed and sunflower oils fell in step with seasonal pressure from the Brazilian soybean crop, which could reach a record amount.

The index of the dairy products it fell by 1.7%, affected by the persistent sluggish world demand for imports of powdered milk and the greater availability for cheese exports in Western Europe.

Updated production and trade forecasts

In a new report on cereal supply and demand, also published on Friday, the FAO has adjusted its forecast for world wheat production by 2023. World production now stands at 785 million tons, the second highest in history, but lower than the previous season, mainly due to the decrease in Australia and Russia compared to their record 2022 productions.

As for maize, Brazil’s output is expected to reach a record level, while Argentina’s is expected to fall below average due to prolonged dry conditions and heat waves. Favorable weather conditions have strengthened yield expectations in South Africa, which is expecting the second highest crop on record.

Meanwhile, the prospects for 2023-2024 of the rice production along and south of the equator they are uneven, largely due to the varied regional impact of the La Niña phenomenon. Looking to the future, we will have to closely monitor the possible appearance of the El Niño phenomenon during the northern hemisphere summer.

The Organization raised its previous forecast for the world grain trade in 2022-2023 to 472 million tons, now 2.2% below its record level from the previous season. World wheat trade is forecast to rise by 2.3%, while coarse grains is likely to rise by 5.5%. It is anticipated that the international rice trade in 2023 it contracts by 4.4% year-on-year.

The world cereal utilization in 2022-2023 it is expected to be 2.780 million tons, and world cereal stocks at the end of the seasons will be 855 million tons. According to these latest forecasts, the ratio of world cereal stocks to utilization in 2022-2023 would be 29.8%, slightly below the 30.8% of the previous 12 months, but still indicating a level of supply relatively comfortable worldwide, according to the Organization.