World Food Prices Hit New High – FAO

Global food prices jumped to an all-time high last month as a result of supply constraints caused by the Ukraine crisis, the UN Food and Agriculture Organization (FAO) said on Friday.

“World food commodity prices took a major jump in March to reach their highest levels ever, as hostilities in the Black Sea area spread shocks across markets for basic cereals and vegetable oils,” the FAO stated in a statement.

The FAO’s food price index increased by 12.6 percent to a record 159.3 points in March, up from 141.4 points in February, “making a giant leap to a new all-time high since the index’s inception in 1990.” The index is a monthly measure of the change in a basket of food commodities’ international prices.

The latest jump includes new all-time highs for vegetable oils, cereals, and meats, the agency said, adding that sugar and dairy goods prices “have also increased dramatically.”

Additionally, the FAO recently warned that food and feed prices could increase by up to 20% as a result of the Russian-Ukrainian conflict, resulting in an increase in global malnutrition.

Russia and Ukraine export the most wheat, corn, barley, and sunflower oil on the planet. Ukrainian exports have been halted, and Russia’s own deliveries may be affected by sanctions, as Black Sea ports used to ship grain remain closed. Industry analysts fear that the current crisis will have an effect on the planting season in Ukraine.

The scenario might result in hunger and food riots in impoverished nations, particularly in Africa, World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala said earlier this month. She emphasized the critical nature of food imports from the Black Sea area to the existence of 35 African states.

Meanwhile, the FAO cut its prediction for world wheat output in 2022 to 784 million tons from 790 million tons last month, noting the risk that at least 20% of Ukraine’s winter crop area would remain unharvested. Additionally, it reduced its prediction for global cereals trade in the current marketing year owing to Black Sea export difficulties. However, the agency added that increased exports from India, the EU, Argentina, and the United States might somewhat counterbalance the trend.

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