The Food and Agriculture Organization of the United Nations (FAO) has reported that, despite a further fall in cereal prices, world food prices rebounded in March, rising for the first time since July 2023.
In its new report, published on Friday by the UN press office in New York, the FAO explains the rise in particular by the soaring prices of vegetable oils and meat.
The food price index, which tracks changes in the international prices of a basket of commodities, rose by 1.1% in March compared to February. On a year-on-year basis, however, prices are still on a downward trend, down 7.7% on March 2023.
The FAO Vegetable Oil Price Index was the driving force behind the rise. Vegetable oil prices jumped by 8%, their highest level in a year, the FAO points out in its monthly report, noting that “quotations for palm, soybean, sunflower and rapeseed oils all rose”.
According to the FAO, the causes of this rise are diverse. International palm oil prices have risen due to the seasonal drop in production in the main producing countries and firm domestic demand in Southeast Asia.
Conversely, the FAO cereal price index fell by 2.6% in March, now located “20% below its March 2022 value”, notes the FAO.
“This decline is due to lower world wheat prices, as a result of strong export competition – highlighted by the cancellation of purchases by China – between the European Union, Russia and the United States”, explains the FAO.
Rice prices also fell this month, down 1.7%. Only corn prices rose, partly due to logistical problems in Ukraine.
Finally, sugar prices plunged by 5.4%. This drop was mainly due to the upward revision of sugar production forecasts for 2023/24 in India, and to the improved pace of the sugar harvest in Thailand at the end of the season.
In addition, world trade in cereals is expected to increase by 1.7% year-on-year to 485 million tonnes in 2023/24.
International trade in coarse grains is expected to expand from 2022/23 onwards, while trade in wheat and rice is set to contract.
The FAO has also adjusted its forecast for world wheat production in 2024 to 796 million tonnes, up 1% on 2023.
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