World food prices fall in February on low cereal prices

UN agency records seventh consecutive month of decline for world food commodity prices

A farmer harvests barley by hand during the harvest season in Sanaa, Yemen. EPA

The UN agency’s food price index dropped by 10.5 per cent on an annual basis in February as prices for major cereal crops decreased globally, offsetting the rising prices of sugar and meat.

The Food and Agriculture Organisation's price index, which tracks the monthly change in the international prices of a basket of commodities, averaged 117.3 points during the month. It was 0.7 per cent down monthly.

February was the seventh consecutive month of decline in the benchmark for world food commodity prices, the UN agency said in its report on Friday.

The cereal price index dropped by 5 per cent last month while international rice prices dipped by 1.6 per cent, according to the data.

“Maize export prices dropped the most amid expectations of large harvests in South America and competitive prices offered by Ukraine, while international wheat prices declined mostly due to a strong export pace from the Russian Federation,” the Rome-based organisation said.

The FAO predicted global cereal utilisation in 2023-2024 to reach 2,823 million tonnes, a yearly increase of 1.1 per cent. The surge is driven by the increased use of maize and wheat for livestock feed.

The agency also released its preliminary forecast for global wheat production in 2024, pegging it at 797 million tonnes, nearly 1 per cent up from last year.

“Favourable weather conditions are also propping up expectations of increased 2024 wheat production in the Russian Federation, an export powerhouse, as well as above-average outputs in China, India and Iran," the agency said.

The vegetable oil price index, which decreased by 1.3 per cent from January, was 11 per cent down from its February 2023 value. World palm oil prices rose slightly in February due to seasonally lower production.

International soy oil prices “dropped markedly, underpinned by prospects of abundant soybean outputs in South America, while ample global export availabilities of sunflower and rapeseed oils pushed their prices down”.

The sugar price index surged 3.2 per cent last month. The increase reflected “persistent concerns over Brazil’s upcoming output after a prolonged period of below-average rainfall as well as forecast production declines in Thailand and India, two leading exporting countries”, the report said.

The FAO meat price index surged by 1.8 per cent from January, with poultry meat quotations rising the most, followed by bovine meat. It was affected by heavy rains disrupting cattle transportation in Australia.

The dairy price index rose by 1.1 per cent, driven by increased import demand from Asian buyers for butter. Additionally, prices for milk powders and cheese also recorded marginal increases.

Conflicts escalate acute food insecurity

The FAO said conflicts and adverse weather conditions are exacerbating hunger in 45 countries around the world. The situation calls for an assessment for external assistance for food, it added.

Conflicts in “East Asia and in West and East Africa are driving alarmingly high levels of the most severe phase of acute food insecurity”, the report said, with "very high concerns" for the situation of the entire population of the Gaza Strip.

Dry weather conditions are also expected to aggravate food insecurity in southern Africa, it added.