Global food prices rose significantly in March to reach their highest levels ever, as the war in the Black Sea region sent shockwaves through markets for staple grains and vegetable oils, according to the Food and Agriculture Organization of the United Nations (FAO).
The FAO food price index reached 159,3 points in March, 12,6% higher than in February, when it had already reached its highest level since its creation in 1990.
The index tracks monthly changes in international prices of a basket of commonly traded food products. The latest level of the index was 33,6% higher than in March 2021.
Breakfast Cereals
Specifically, the FAO cereal price index was 17,1% higher in March than in February, driven by large increases in wheat prices, largely as a result of the war in Ukraine.
The Russian Federation and Ukraine together accounted for approximately 30% and 20% of global wheat and corn exports, respectively, over the past three years. Global wheat prices rose 19,7% during the month, exacerbated by concerns about crop conditions in the United States. Meanwhile, corn prices registered a monthly increase of 19%, reaching a record high, along with barley and sorghum.
Contrasting trends among the various origins and qualities kept the March value of the FAO rice price index little changed since February, and therefore still 10% below the level of the previous year.
Vegetable oil
However, the vegetable oil price index increased by 23,2%, driven by rising prices for sunflower seed oil, of which Ukraine is the world's largest exporter.
Prices for palm, soybean, and rapeseed oil also increased sharply as a result of higher sunflower oil prices, and soybean oil prices were further supported by concerns about reduced exports from South America.
Sugar
As for the sugar price index, it has risen 6,7% since February, reversing recent declines to reach a level more than 20% higher than in March 2021.
Favorable production prospects in India prevented further monthly price increases.
Meat
The FAO meat price index rose 4,8% in March to a record high, driven by increased pork prices related to a shortage of pigs for slaughter in Western Europe.
International poultry prices also stabilized in line with reduced supplies from major exporting countries, following outbreaks of avian influenza.
Dairy products
Finally, the FAO dairy product price index increased by 2,6% and was 23,6% higher than in March 2021, as butter and milk powder prices rose sharply amid increased import demand for short- and long-term deliveries, especially from Asian markets.
