Global food prices rose in March

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally traded food products, averaged 118.3 points in March, a 7.7 percent decrease from its value a year ago.

Leading the rise in March, the FAO Vegetable Oil Price Index increased by 8 percent compared to February, reaching its highest level in the last year, driven by rising prices for palm, soy, sunflower, and rapeseed oils. International palm oil prices increased due to seasonally lower production in leading producing countries and strong domestic demand in Southeast Asia, while soy oil prices began to rise after reaching multi-year lows, driven by strong demand from the biofuel sector, particularly in Brazil and the United States.

The FAO Dairy Price Index rose by 2.9 percent compared to February, marking its sixth consecutive monthly increase, led by a rise in world cheese and butter prices. The FAO Meat Price Index rose by 1.7 percent from the previous month, as international prices for poultry, pig, and bovine meats increased.

In contrast, the FAO Cereal Price Index fell by 2.6 percent, remaining on average 20 percent below its March 2022 value. This decline was led by global wheat export prices, which fell due to strong export competition between the European Union, the Russian Federation, and the United States, a trend further exacerbated by cancelled purchases by China. While maize export prices rose in March, partly due to logistical challenges in Ukraine, the FAO All Rice Price Index fell by 1.7 percent due to a decrease in global import demand.

The FAO Sugar Price Index fell by 5.4 percent compared to February, a decline influenced by an upward revision of the 2023/24 sugar production forecast in India and an increased pace of harvesting in Thailand.

INCREASE IN CEREAL DEMAND

On Friday, the FAO also released a new Cereal Supply and Demand Brief, raising its 2023/24 world cereal production forecast to 2 billion 841 million tons and sharing expectations for increased production of maize, rice, and wheat.

Global cereal utilization in the 2023/24 season is estimated at 2 billion 828 million tons, a 1.3 percent increase over the 2022/23 season, while world cereal stocks are projected to close the 2024 season at 894 million tons. This figure, which corresponds to a 2.3 percent increase from the beginning of the year, indicates that the world cereal stocks-to-use ratio will be 31.0 percent.

World cereal trade in the 2023/24 period is expected to reach 485 million tons, an increase of 1.7 percent compared to the previous year. International trade in coarse grains is expected to expand from 2022/23, while trade in wheat and rice is likely to shrink.

The FAO also updated its 2024 global wheat production forecast to 796 million tons, a 1.0 percent increase compared to 2023.

While planting for coarse grains will soon begin in the northern hemisphere, harvesting began long ago south of the equator.