Food Prices Eased in April after Record Surge in March: UN Food Agency

World food prices fell slightly in April after reaching a record high in March, but global food security remained a concern due to difficult market conditions, according to the United Nations Food and Agriculture Organization on Friday. Food and Agriculture Organization's (FAO) food price index, which tracks the most widely traded food commodities worldwide, averaged 158.5 points last month, down from 159.7 in March. The previous month's figure was 159.3.

"The small decrease in the index is a welcome relief, particularly for low-income food-deficit countries," said FAO Chief Economist Maximo Torero Cullen. "However, food prices remain close to recent highs, reflecting persistent market tightness and posing a challenge to global food security for the most vulnerable."

Despite a month-on-month decline, the April index was 29.8 percent higher than a year ago, boosted in part by concerns about the impact of Russia's invasion of Ukraine.

After a 17 percent increase in March, the agency's cereal price index fell 0.7 percent in April. Wheat prices rose 0.2 percent while maize prices fell 3.0 percent. The blockage of Ukrainian ports and concerns about crop conditions in the United States, according to FAO, were partially offset by larger shipments from India and higher-than-expected exports from Russia.

In April, the FAO's vegetable oil price index fell 5.7 percent as demand rationing pushed down prices for palm, sunflower, and soy oils. Sugar prices rose 3.3 percent, meat prices rose 2.2 percent, and dairy prices rose 0.9 percent.

The FAO reduced its projection of world wheat production in 2022 to 782 million tonnes, down from 784 million last month, in separate cereal supply and demand estimates released on Friday. The forecast accounted for a 20% decrease in harvested area in Ukraine and a 20% decrease in output in Morocco due to a drought in the north African country.

With nearly all crops harvested, the FAO's global cereal production forecast for 2021 remained unchanged at 2.799 billion tonnes, a 0.8 percent increase over 2020 levels.

The agency raised its forecast for global cereals trade in the 2021/22 marketing year to 473 million tonnes, up 3.7 million tonnes from last month's forecast but 1.2 percent below the record level set in 2020/21.

According to FAO, the upward revision reflected stronger Russian exports based on continued shipments in April, primarily to Egypt, Iran, and Turkey. FAO warned in March that the conflict in Ukraine could cause food and feed prices to rise by up to 20%, increasing the risk of malnutrition.