World food prices fall in April to provide ‘a welcome relief' for low-income countries

World food prices decreased last month after reaching a high in March amid repercussions from Russia's military offensive in Ukraine, the UN Food and Agriculture Organisation has said.

The FAO's food price index averaged 158.2 points in April, down 0.8 per cent from the surge in March, but remained nearly 30 per cent higher than in April last year.

The index tracks monthly changes in the international prices of a basket of food commodities. The decrease was led by a slight decline in the prices of vegetable oils and cereals. "The small decrease in the index is a welcome relief, particularly for low-income food-deficit countries, but still food prices remain close to their recent highs, reflecting persistent market tightness and posing a challenge to global food security for the most vulnerable," Maximo Torero, the FAO's chief economist, said on Friday.

The vegetable oil price index registered a 5.7 per cent drop in April, shedding almost a third of the increase in March. Demand rationing pushed down the prices for palm, sunflower and soya oils, the FAO said, while uncertainties surrounding export availabilities from Indonesia – the world’s leading exporter of palm oil – contained further declines in prices on the international market. The cereal price index declined by 0.7 points in April, due to a 3 per cent drop in world maize prices.

Wheat prices rose 0.2 per cent, strongly affected by continued blockage of ports in Ukraine. The country, together with Russia, accounts for about 30 per cent of global wheat exports.

Other factors behind the increase included concerns over crop conditions in the US, though tempered by larger shipments from India and higher-than-expected exports from Russia.

Meanwhile, international rice prices increased by 2.3 per cent, bolstered by strong demand from China and the Near East. The FAO also released updated forecasts for world cereal supply and demand that indicate that although stocks are rising, trade is likely to decline this year.

Global wheat production is predicted to grow to 782 million tonnes, which incorporates an expected 20 per cent decline in harvested area in Ukraine, as well as declines owing to drought in Morocco.

The FAO said the sugar price index rose 3.3 per cent in April, mainly due to higher ethanol prices and concerns over the slow start of the 2022 harvest in Brazil, the world’s largest sugar exporter.

The meat price index reached a record high last month, increasing by 2.2 per cent. Poultry costs were affected by disruptions to exports from Ukraine and rising avian influenza outbreaks in the Northern Hemisphere.

The dairy price index also jumped by 0.9 per cent, driven by what the FAO described as "persistent global supply tightness", with milk output in Western Europe and Oceania continuing to track below seasonal levels.

The agency reported that world butter prices rose the most, influenced by rising demand associated with the current shortage of sunflower oil and margarine.