The Food and Agriculture Organization of the United Nations (FAO) announced on Friday that the benchmark index for global food commodity prices saw a 1.1 percent rise in March, marking its first increase in seven months. This surge was primarily driven by higher international quotations for vegetable oils, dairy products, and meat.
The FAO Food Price Index, which monitors monthly changes in the prices of globally-traded food commodities, averaged 118.3 points in March. This figure reflects a decrease of 7.7 percent compared to the same period last year.
Leading the upward trend in March was the FAO Vegetable Oil Price Index, which soared by 8.0 percent from February to reach a one-year high. This increase was fueled by rising prices for palm, soy, sunflower, and rapeseed oils. Palm oil prices saw a boost due to lower outputs in major producing countries and increased domestic demand in Southeast Asia, while soyoil prices rebounded from multi-year lows, buoyed by robust demand from the biofuel sector, particularly in Brazil and the United States.
Moreover, the FAO Dairy Price Index continued its upward trajectory for the sixth consecutive month, rising by 2.9 percent from February, mainly driven by increases in world cheese and butter prices. Similarly, the FAO Meat Price Index climbed by 1.7 percent, with international prices rising for poultry, pig, and bovine meats.
However, the FAO Cereal Price Index experienced a decline of 2.6 percent, averaging 20 percent below its March 2023 level. This drop was primarily attributed to decreased global wheat export prices, driven by intense export competition among the European Union, the Russian Federation, and the United States. Meanwhile, maize export prices inched up due to logistical challenges in Ukraine, while the FAO All Rice Price Index dipped by 1.7 percent amid subdued global import demand.
Additionally, the FAO Sugar Price Index witnessed a 5.4 percent decline from February, largely influenced by an upward revision in India’s 2023/24 sugar production forecast and improved harvest pace in Thailand.
In a separate report, FAO revised its forecast for world cereal production in 2023/24, projecting an increase to 2,841 million tonnes, driven by expectations of greater outputs of maize, rice, and wheat. Global cereal utilization is forecasted to rise by 1.3 percent, while cereal stocks are expected to reach 894 million tonnes by the end of the 2024 season. World cereal trade is anticipated to rise by 1.7 percent, with coarse grains trade expanding while wheat and rice trade contracts.
