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Home Economy

Global Decline In Food Costs

Debi Çakar by Debi Çakar
4 March 2023
in Economy
Reading Time: 2 mins read
0
Global Decline In Food Costs

The Food and Agriculture Organization of the United Nations (FAO) announced that global food prices fell for the eleventh consecutive month in January, driven by declines in vegetable oil and sugar prices.

According to the Food and Agriculture Organization of the United Nations (FAO), the FAO Food Price Index, which measures monthly changes in food prices worldwide, fell 0.8% in January from the previous month to 131.2 points. This was the eighth consecutive month of decline in the index.

Table of Contents

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  • A Positive Decline in Food after the Russian War
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  • What About The FAO Price Index?
  • Rice Forecast Lowered

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A Positive Decline in Food after the Russian War

With the start of the conflict between Russia and Ukraine, the index fell by about 18 percent (28.5 points) from its record high in March last year, FAO said in a statement.

The index had reached a record high of 159.7 points in March 2022, after the start of the conflict between Russia and Ukraine. In January, vegetable oils, dairy products and sugar were the main contributors to the global decline in food costs.

Falling prices for sunflower seeds and coconut oil pushed the vegetable oil price index down 2.9 percent from the previous month. A year ago, the index was about 25 percent lower at 140.4 points.

Global Decline In Food Costs

Cereals Were The Most Worrisome Food Item

The price index for cereals was 0.1 percent higher than the previous month and 4.8 percent higher than a year ago. International wheat prices fell 2.5 percent in January as global supplies increased and production forecasts for Australia and Russia were exceeded. In contrast, rice prices rose 6.2 percent from the previous month, reflecting limited supplies, strong local demand in Asia and exchange rate fluctuations.

The sugar price index fell 1.1 percent year-on-year as favorable weather conditions in Brazil, the world’s largest sugar exporter, improved prospects for efficient production.

What About The FAO Price Index?

The FAO Milk Price Index and FAO Meat Price Index fell 1.4 percent and 0.1 percent, respectively.

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FAO also released the Grain Supply and Demand Summary Report, which provides forecasts of world production, consumption, trade and stock trends. According to the report, FAO revised its forecast for global cereal production from 2 billion 756 million tons to 2 billion 756 million tons in 2022.

The study predicts that global wheat production will reach a record high in 2022 due to significant adjustments in wheat production in Australia and Russia.

Rice Forecast Lowered

FAO lowered its forecast for world rice production by 1.2 million tons to 512 million tons due to lower than expected production in China.

World cereal consumption is forecast to decline 0.7% to 2.0779 billion tons from 2021-2022 to 2022-2023.

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Tags: globalpriceRussiaukraineworld
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Debi Çakar

Debi Çakar

Financial Analyst I currently graduated from Bahçeşehir University with a double major in Economics & Finance and Industrial Engineering. I can say that my career experiences started after I enrolled at the university in a serious sense. I began my career working separately in the import and export units in the logistics sector; continued with leading marketing & communications, sales & project management efforts in the pharmaceutical industry; managing software, and design teams, transforming customers looking for digital solutions in the field of web and mobile applications, creating a new brand identity for them during my time working in a digital agency. In my free time, together with a friend and our investor, we started an e-commerce business on Amazon by selling in six different marketplaces in 2019; increased our monthly turnover up to $15k dollars; grew sales by an average of over 100% each month. We are not in operation at the moment, but I am doing market research for e-commerce again.

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