- The FAO Food Price Index averaged at 127.2 points in April 2023, up 0.6 percent from March.
- According to FAO, the April rise reflected higher prices for sugar, meat, and rice.
- Price declines were, however, recorded for cereals, dairy, and vegetable oil price indices.
- FAO Chief Economist Maximo Torero terms the increase in rice prices “extremely worrisome”.
Global food prices edged up in April for the first time in the past year. The FAO Food Price Index, which tracks monthly price changes, averaged 127.2 points in April, up 0.6 percent from March.
The Index was 19.7 percent below its level in April 2022, but still 5.2 percent higher than in April 2021. “As economies recover from significant slowdowns, demand will increase, exerting upward pressure on food prices,” FAO Chief Economist Maximo Torero said.
April rise reflected higher prices for sugar, meat and rice, which offset declines in cereals, dairy and vegetable oil indices.
The FAO Sugar Price Index rose 17.6 percent from March, reaching its highest level since October 2011. This rise was attributed to reduced production expectations and outcomes in India, China, Thailand and the European Union caused by drought.
Additionally, a slow start of the sugarcane crop harvest in Brazil, along with higher international crude oil prices- which can increase demand for sugarcane-based ethanol contributed to the significant rise in the sugar price index.
On the other hand, the FAO Meat Price Index rose marginally by1.3 percent during the month, driven primarily by higher pig meat quotations, followed by poultry prices, which increased amid Asian import demand and production curbs spurred by animal health issues.
International bovine meat prices also increased due to a decline in cattle supplies for slaughter, especially in USA.
Meanwhile, price indices for other major food commodity categories, with the exception of rice, continued their declining trend. The FAO Cereal Price Index dipped 1.7 percent from March and averaged 19.8 percent below its April 2022 value.
Reduced harvests due to higher input costs
International wheat prices declined by 2.3 percent, due mostly to large exportable availability in Australia and the Russian Federation. World maize prices fell 3.2 percent as supplies in South America seasonally increased with ongoing harvests.
On the other hand, against a backdrop of reduced harvests caused by higher input costs and adverse weather, especially outside of Asia, sales to Asian buyers sustained an increase in international rice prices.
“It is important that we continue to track very closely the evolution of prices and the reasons for increases in prices,” said Torero. “At the same time, the increase in rice prices is extremely worrisome and it is essential that the Black Sea initiative is renewed to avoid any other spikes in wheat and maize,” he added.
The FAO Vegetable Oil Price Index declined by 1.3 percent in April, registering its fifth consecutive monthly decline. World palm oil prices were stable, while quotations for soy, rapeseed and sunflower oils declined. The decline was in step with seasonal harvest pressure from a potentially record soybean crop in Brazil.
The FAO Dairy Price Index dropped by 1.7 percent, impacted by easing global demand for milk powders and higher cheese export availability in Western Europe.