World food prices rebound from three-year low, says UN agency

World food prices rebounded in March from a three-year low, boosted by increases in vegetable oils, meat and dairy products, according to the United Nations food agency’s latest price index.

The Food and Agriculture Organization’s (FAO) index, which tracks the most globally traded food commodities, averaged 118.3 points in March, up from a revised 117.0 points the previous month, the agency said on Friday.

The February reading was the lowest for the index since February 2021 and marked a seventh consecutive monthly decline.

International food prices have fallen sharply from a record peak in March 2022 at the start of Russia’s full-scale invasion of fellow crop exporter Ukraine.

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The FAO’s latest monthly reading was 7.7 per cent below the year-earlier level, it said.

In March, the agency’s vegetable oil price index led gains, jumping eight per cent month on month, with all major oils registering increases.

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The dairy index gained 2.9 per cent for a sixth straight monthly rise, driven by cheese and butter prices, while the FAO’s meat index added 1.7 per cent, reflecting higher poultry, pig and beef prices.

Those gains outweighed declines for cereals, which shed 2.6 per cent from February, and for sugar, which fell 5.4 per cent.

Wheat led the decline in cereals amid strong export competition and canceled purchases by China, offsetting a slight rise for maize (corn) prices partly due to logistical difficulties in Ukraine, the FAO said.

Weaker sugar prices mainly reflected an upward revision to expected production in India and an improved harvest pace in Thailand, it said.

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In separate cereal supply and demand data, the FAO nudged up its forecast for world cereal production in 2023/24 to 2.841 billion metric tons from 2.840 million projected last month, up 1.1 one per cent from the previous season.

For upcoming crops, the agency trimmed its forecast for 2024 global wheat output to 796 million tons, from 797 million last month, due to reduced expectations for European Union and UK crops following rain-hit sowing and dry conditions in some areas.

For maize, a fall in world production was anticipated but the volume would remain above the average of the past five years, the FAO said, without giving a precise forecast.