Global food commodity prices fell for the 12th straight month in March, “driven by declines in world quotations for cereals and vegetable oils,” the Food and Agriculture Organization of the United Nations said Friday.

The overall FAO Food Price Index, which tracks the international prices of commonly traded food commodities, averaged 126.9 points in March, down 2.1% from February and 20.5% from its peak in March 2022. 

“A mix of ample supplies, subdued import demand and the extension of the Black Sea Grain Initiative contributed to the drop,” FAO said.

FAO Chief Economist Máximo Torero nonetheless warned that “while prices dropped at the global level, they are still very high and continue to increase in domestic markets, posing additional challenges to food security. This is particularly so in net food importing developing countries, with the situation aggravated by the depreciation of their currencies against the U.S. dollar or the Euro and mounting debt burden.”

A 7.1% drop in international wheat prices contributed to a decline in the FAO Cereal Price Index by 5.6% from February. The organization cited “strong output in Australia, improved crop conditions in the European Union, high supplies from the Russian Federation and ongoing exports from Ukraine from its Black Sea ports.”

World corn prices fell 4.6%, a result in part of expectations for a record harvest in Brazil. Rice prices were down 3.2% “amid ongoing or imminent harvests in major exporting countries, including India, Vietnam and Thailand.”
The FAO Vegetable Oil Price Index was 3% lower than February and 47.7% lower than a year ago.

“Ample world supplies and subdued global import demand pushed down soy, rapeseed and sunflower oil quotations,” FAO said. “That more than offset higher palm oil prices, which rose due to lower output levels in Southeast Asia due to floodings and temporary export restrictions imposed by Indonesia.”

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The Dairy Price Index dropped 0.8% in March. “Butter prices increased due to solid import demand, while those of cheese dipped due to slower purchases by most leading importers in Asia as well as increased availabilities in leading exporters,” FAO said.

Other results include a 1.5% rise in the index for sugar prices and a 0.5% rise in the meat index. In addition, in its Cereal Supply and Demand Brief, FAO raised its forecast for world wheat production in 2023 to 786 million tons, 1.3% percent below 2022’s level and the second largest on record.

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