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March Food Prices Drop For 12th Consecutive Month

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The United Nations Food and Agriculture Organization’s world price index fell for the 12th consecutive month in March, and is now down 20.5% from a record high set one year ago following Russia’s invasion of Ukraine.

The Food and Agriculture Organization’s (FAO) price index, which tracks the most frequently traded food commodities worldwide, averaged 126.9 points in March, down from 129.7 in February, the agency reported on Friday. It was the lowest level since July 20, 2021.

The original reading for February was 129.8.

According to FAO, the drop was caused by a combination of ample supplies, low import demand, and the extension of a deal allowing the safe export of Ukrainian grain via the Black Sea. The decline in the index was attributed to lower prices for cereals, vegetable oils, and dairy products, which offset increases in sugar and meat prices, according to the Rome-based agency.

“While global prices have fallen, they remain very high and continue to rise in domestic markets, posing additional challenges to food security,” said Maximo Torero, FAO’s chief economist, in a statement.

“This is especially true in net food importing developing countries, where the situation is exacerbated by currency depreciation against the US dollar or the euro, as well as a mounting debt burden,” he added. In March, the FAO cereal price index fell 5.6% month on month, with wheat falling 7.1%, maize falling 4.6%, and rice falling 3.2 percent.

The index for vegetable oils fell 3.0%, or 47.7%, from its peak in March 2022, while the dairy index fell 0.8%.

Sugar, on the other hand, increased 1.5% to its highest level since October 2016, owing to concerns about declining production prospects in India, Thailand, and China. The meat price index increased 0.8%.

Increased wheat production

In a separate report on cereal supply and demand, the FAO raised its forecast for world wheat production in 2023 to 786 million tonnes, 1.3% lower than in 2022 but still the second highest output on record.

“Near-record sown areas are expected in Asia, while dry conditions affect North Africa and southern Europe,” according to the FAO. FAO also increased its forecast for global cereal production in 2022 to 2.777 billion tonnes, a 1.2% decrease from the previous year. World rice production in 2022/23 was 516 million tonnes, 1.6% lower than the record harvest in 2021/22.

According to FAO, global cereal utilisation in 2022/23 will be 2.779 billion tonnes, a 0.7% decrease from 2021/22. World cereal stocks are expected to fall 0.3% from their opening levels to 850 million tonnes by the end of the 2022/2023 season.

Info source – Malaysia Now

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