The United Nations Food and Agriculture Organization (FAO) reported on March 5, 2024, that the benchmark index for global food commodity prices increased by 1.1 percent in March of that year. This uptick marks the first rise in seven months, attributed to surging international quotations for vegetable oils, dairy products, and meat.
The FAO Food Price Index, which monitors monthly changes in the international prices of various globally-traded food commodities, averaged 118.3 points in March. While this reflects a decrease of 7.7 percent compared to the previous year, it signals a positive shift in recent trends.
Leading the surge in March was the FAO Vegetable Oil Price Index, which saw an 8.0 percent increase from February, reaching a one-year high. This spike was driven by higher quotations for palm, soy, sunflower, and rapeseed oils. Factors contributing to the rise include seasonally lower outputs in major producing countries and increased domestic demand in Southeast Asia.
Similarly, the FAO Dairy Price Index continued its upward trajectory for the sixth consecutive month, rising by 2.9 percent in March. This increase was propelled by rising world cheese and butter prices. Additionally, the FAO Meat Price Index recorded a 1.7 percent increase, with international prices for poultry, pig, and bovine meats all on the rise.
In contrast, the FAO Cereal Price Index experienced a decline of 2.6 percent, averaging 20 percent below its March 2023 value. This drop was primarily driven by decreasing global wheat export prices due to strong export competition among major producers. However, maize export prices edged upwards, partly due to logistical challenges in Ukraine.
The FAO Sugar Price Index also declined by 5.4 percent from February, attributed to an upward revision in the 2023/24 sugar production forecast in India and improved harvesting rates in Thailand.
In addition to the monthly index, the FAO released its Cereal Supply and Demand Brief, forecasting an increase in world cereal production to 2,841 million tonnes in 2023/24. This rise reflects expectations of greater outputs of maize, rice, and wheat. Global cereal utilization is projected to increase by 1.3 percent, with cereal stocks forecasted to reach 894 million tonnes by the end of the season.
Looking ahead, world trade in cereals is expected to rise by 1.7 percent in 2023/24, with expansions in coarse grains trade offsetting contractions in wheat and rice trade. Adjustments to global wheat production forecasts and expectations for upcoming coarse grain crops underscore the dynamic nature of global food markets, with both challenges and opportunities shaping the year ahead.
