The Food and Agriculture Organization of the United Nations Food Price Index (FAO) fell by 0.8% in January compared to December and almost 18% in relation to the maximum reached in March 2022.
The decrease was due to the decline in prices of vegetable oils, dairy products and sugarwhile those of cereals and meat remained practically stable.
The price of vegetable oils fell by 2.9% in January. Global costs for palm and soybean oils fell on weak global import demand, while those for sunflower and rapeseed oils fell on ample export reserves.
Dairy goes down
Butter and milk powder prices trended lower on weaker demand from major importers and increased supplies from New Zealand.
Bumper sugar crops in Thailand and favorable weather conditions in Brazil offset the impact on prices due to lower crop yields in India and higher gasoline prices in Brazil, which support ethanol demand, as well as the appreciation of the Brazilian real against the US dollar.
Cereals are kept
However, the amount of cereals remained practically at the same level as in December (barely grew 0.1%), standing 4.8% above the records reached a year ago.
International wheat prices were down 2.5% as production in Australia and Russia exceeded expectations. Corn costs rose slightly on strong export demand from Brazil and drought concerns in Argentina.
The amount of rice grew by 6.2% compared to December, due to lower availability, strong local demand in some Asian exporting countries and exchange rate fluctuations.
The supply of cereals will be scarce in the 2022-23 season
In its report on cereal supply and demand, also released on Friday, the FAO raised its forecast for world cereal production in 2022; however, global cereal supplies are forecast to continue to decline in the 2022-23 season.
World cereal production for 2022 It is expected at 2,765 million tons, 1.7% below the results of 2021.
Upward revisions for Australia and Russia now point to a record world wheat output in 2022, while aggregate coarse grain output is forecast to decline by 3.3% from a year earlier.
World rice production was revised down as lower-than-expected production in China more than offset upward revisions in Bangladesh and other countries. Consequently, world rice production is now projected to decline by 2.6% from its 2021 record high.
Looking ahead to 2023, the first indications point to a likely increase in winter wheat acreage in the northern hemisphere, especially in the United States of America, driven above all by its high prices.