Rising vegetable oil values helped to lift world food commodity prices to their first increase in seven months in March.
The Food and Agriculture Organization of the United Nations (FAO) reported Friday that its food price index – which tracks monthly changes in the international prices of a set of globally traded food commodities – averaged 118.3 points last month. That is up 1.1% from February and the first time the index has risen since September 2023 when it ticked just fractionally higher to 121.5.
However, the March index was still 7.7% below a year earlier and 25.7% below its all-time peak of 159.3 in March 2022 in the wake of the Russian invasion of Ukraine.
The vegetable oil price index led the increase in March, rising a hefty 8% from February and reaching a one-year high as quotations for palm, soy, sunflower, and rapeseed oils all rose, the FAO said. International palm oil prices increased due to seasonally lower outputs in leading producing countries and firm domestic demand in Southeast Asia. Meanwhile, soyoil prices recovered from multi-year lows, boosted by robust demand from the biofuel sector, particularly in Brazil and the US.
The dairy price index increased for the sixth consecutive month, up 2.9% from February, led by rising world cheese and butter prices. The meat price index also increased, rising 1.7% from the previous month, with international prices up for poultry, pork, and beef.
In contrast, the cereal price index declined by 2.6% in March, averaging 20% below its March 2023 value. The drop was led by decreasing global wheat export prices, which declined due to ongoing strong export competition – underscored by cancelled purchases by China – among the European Union, the Russian Federation and the US. Corn export prices edged upwards in March, partly due to logistical difficulties in Ukraine, while rice was down 1.7% amid subdued global import demand.
The sugar price index fell 5.4% from February, mainly driven by an upward revision to the 2023/24 sugar production forecast in India and the improved pace of the harvest in Thailand.
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