Global food prices fell in January for the tenth straight month, falling about 18 percent from an all-time high reached last March following Russia’s invasion of Ukraine, the United Nations food agency said on Friday.
The Food and Agriculture Organization of the United Nations (FAO) Price Index, which tracks the world’s most traded food products, averaged 131.2 points last month, up from 132.2 in December. It was the lowest reading since September 2021.
December’s figure was revised down from an original estimate of 132.4.
The fall in the prices of vegetable oils, dairy products and sugar contributed to the index’s decline, while cereals and meat remained stable, according to FAO.
In other cereal supply and demand estimates released on Friday, FAO raised its forecast for world cereal production in 2022 to 2.765 billion tonnes, up from a previous estimate of 2.756 billion tonnes.
The FAO Cereal Price Index rose just 0.1 percent m/m in January, up 4.8 percent for the year. The international prices of the wheat fell 2.5%, with production in Australia and Russia beating expectations. By contrast, rice rose 6.2 percent, driven in part by strong local demand in some Asian exporting countries.
Vegetable oil prices fell 2.9% in January, the dairy index fell 1.4% and sugar fell 1.1%. Meat was down just 0.1%.
On cereal supply and demand, FAO said it expects record global wheat production in 2022, thanks to revised harvest forecasts for Australia and Russia.
The forecast for global rice production was revised down due to lower-than-expected production in China, and is now forecast to decline 2.6% from its all-time high in 2021.
Looking ahead to 2023, FAO noted that early indications point to a likely expansion of winter wheat crops in the northern hemisphere. However, he warned that high fertilizer costs can affect yields.
World cereal utilization in 2022/23 is forecast to decline by 0.7 percent from the previous year to 2 779 million tonnes. The estimate of world cereal stocks was set at 844 million tonnes, bringing the world stocks-to-use ratio for 2022/23 to 29.5 percent from 30.8 percent in 2021/22.
