World food prices show signs of cooling down

The FAO Food Price Index averaged 158.5 points in April, down 1.2 points from a month earlier. Of which, cereal prices fell 0.7% after rising 17% the previous month. Corn prices fell 3%, wheat prices edged up 0.2%.

Wheat was impacted by congestion at ports in Ukraine and production in the US, FAO explained. However, these worries were partly offset by large shipments from India and higher-than-expected exports from Russia.

The FAO Vegetable Oil Price Index fell 5.7% in April, as falling demand pushed down prices for palm, sunflower and soybean oils. The price of sugar increased by 3.3%, the price of meat increased by 2.2% and the price of milk increased by 0.9%.

Máximo Torero Cullen, FAO’s chief economist, said the small drop in the index was welcome, especially for low-income countries, which have to rely on imports from outside. However, the prices of these essential commodities are still close to the recent highs, reflecting the continued tightening of the market. It also poses a global food security challenge to the most vulnerable.

Despite the decrease from the previous month, the global food price index in April was still 29.8% higher than the same period last year. Part of the reason comes from concerns about the Russia-Ukraine conflict.

In separate grain supply and demand estimates, FAO has slightly cut its forecast for this year’s world wheat production to 782 million tonnes, from 784 million last month. This is due to a 20% decrease in the expected harvest area in Ukraine and a decrease in production in Morocco due to drought.

The FAO also forecasts that total global cereal trade in the 2021/2022 crop year will reach 473 million tonnes, 1.2 percent lower than in the previous crop year, due to a decline in maize and other coarse grains. However, rice and wheat trade is expected to increase.

Duc Minh (according to Reuters)