Global food prices continue to decline: FAO

UNITED NATIONS (Reuters): Global food prices dropped for the 10th consecutive month in January, the Food and Agriculture Organisation (FAO) of the United Nations said on Friday.

Price indices for vegetable oils, dairy and sugar drove the January decline, the Rome-based agency said while issuing two new reports on food production expectations.

The FAO food price index fell 17.9% below its all-time peak, reached in March 2022 following Russia’s invasion of Ukraine, it was pointed out.

The downward pricing trend was helped in part by a pivotal agreement signed in July to unblock Ukraine grain exports.

Tracking monthly changes in the global prices of commonly traded food commodities, the index averaged 131.2 points in January, falling 0.8% since December.

FAO reported small price decreases on its latest meat and sugar indices.

“Strong harvest progress in Thailand and favourable weather conditions in Brazil outweighed the impact on sugar prices due to concerns over lower crop yields in India, higher gasoline prices in Brazil, which support demand for ethanol, as well as Brazilian real’s appreciation against the US dollar,” the report stated.

At the same time, vegetable oil prices fell 2.9%, stemming from subdued global import demand for palm and soy oils and ample export availabilities of sunflower seed and rapeseed oils.

Early indications point to likely area expansions for winter wheat cropping in the northern hemisphere. However, higher costs may affect the amount of fertiliser than can be applied to crops, with adverse implications for yields.

According to FAO, relatively high planting is projected in Pakistan as standing water from the 2022 floods is causing less hindrance than initially anticipated.