According to the UN's Food and Agriculture Organization (FAO), the global food prices saw a steep surge in February, reaching an all-time high, led by vegetable oils and dairy products.
The FAO Food Price Index averaged 140.7 points in February, up 3.9% from January, 20.7% higher than a year ago, and 3.1 points higher than in February 2011.
The Index tracks monthly changes in the international prices of commonly-traded food commodities.
The FAO Vegetable Oils Price Index led the increase, climbing 8.5% from the previous month to reach a new record peak, owing mostly to higher quotations for palm, soy, and sunflower oils.
The sharp increase in the vegetable price index was primarily driven by sustained global import demand, which coincided with a few supply-side factors, such as reduced export availability of palm oil from Indonesia, the world's leading exporter, lower soybean production prospects in South America, and concerns about lower sunflower oil exports due to Black Sea disruptions.
The FAO Dairy Price Index averaged 6.4% higher in February than in January, owing to lower-than-expected milk supplies in Western Europe and Oceania, as well as persistent import demand, particularly from North Asia and the Middle East.
The FAO Cereal Price Index increased 3.0 percent from the previous month, led by rising coarse grain quotations, with international maize prices climbing 5.1 percent due to a combination of continued concerns over crop conditions in South America, uncertainty about maize exports from Ukraine, and rising wheat export prices.
World wheat prices rose by 2.1%, owing mostly to concerns about global supply flows from Black Sea ports.
International rice prices rose by 1.1%, bolstered by strong demand for fragrant rice from Near East Asian buyers and the appreciation of several exporters' currencies against the US dollar.
FAO also issued its most latest Grain Supply and Demand Brief, which includes a tentative forecast for world wheat output in 2022.
Global wheat output is expected to rise to 790 million tonnes, with excellent yields and widespread planting in North America and Asia countering a predicted minor decline in the European Union and the negative impact of drought conditions on crops in several North African nations.
Maize harvesting will begin shortly in the Southern Hemisphere, with Brazil's output expected to set a record high and Argentina and South Africa producing above average.
FAO has also revised its prediction for global grain output in 2021, which is now set at 2,796 million tonnes, a 0.7% rise over the previous year.
The global cereal utilization in 2021/2022 is now projected to be 2,802 million tonnes, representing a 1.5% yearly increase. Global grain stocks are expected to increase marginally year on year to 836 million tonnes by 2022.
According to FAO, the global cereal stocks-to-use ratio would be 29.1%, "marking an eight-year low but still suggesting an overall acceptable supply level."
FAO also raised its forecast for world trade in cereals to 484 million tonnes, up 0.9 per cent from the 2020/2021 level. This forecast does not assume potential impacts from the conflict in Ukraine.
FAO is actively monitoring the situation and will assess the impacts in due course.
