World Food Prices Fall Seventh Straight Month in February 2024

By Adedapo Adesanya

The world price index fell in February for a seventh consecutive month as lower prices for all major cereals more than offset the rising price of sugar and meat, according to data from the United Nations food agency, the Food and Agriculture Organization (FAO).

The price index, which tracks the most globally traded food commodities, averaged 117.3 points in February, down from a revised 118.2 points the previous month, the agency said on Friday.

The February reading was the lowest since February 2021.

The cereal index fell 5 per cent month-on-month in February to stand 22.3 per cent below its level a year ago thanks to expectations of large maize harvests in South America and competitive prices offered by Ukraine.

In line with the softer tone in wheat and maize markets, world prices of barley and sorghum also eased. International rice prices edged down by 1.6 per cent in February, as, aside from Indonesian purchases, fresh import demand remained broadly slow and new-crop harvests began in some suppliers.

Vegetable oil prices fell 1.3 per cent in February from January to stand 11 per cent below year-ago levels amid prospects for abundant South American supplies. Rapeseed and sunflower oil prices also fell, thanks to ample exports.

The UN agency’s sugar index, by contrast, rose 3.2 per cent month-on-month in February, reflecting persistent concerns over top producer Brazil’s upcoming output and forecast production declines in Thailand and India.

Improved precipitation in late February in the key growing areas of Brazil and the weakening of the Brazilian Real against the United States Dollar contained the rise in world sugar prices.

FAO Meat Price Index averaged 112.4 points in February, up by 2.0 points (1.8 per cent) from January, reversing the seven months of consecutive drops, and standing 0.9 points (0.8 per cent) below its corresponding value a year ago.

Bovine meat prices were due to lower-than-anticipated supply from Australia, as heavy rains disrupted cattle transportation from major producer regions.

Meanwhile, pig meat prices increased slightly due to higher demand from China, together with higher internal demand in Western Europe amidst a lingering tight supply situation. By contrast, international ovine meat prices declined due to a slowdown in the pace of imports by China and a record-breaking production following flock rebuilding in Australia.

In a separate report on cereal supply and demand, the agency raised its estimate for 2023 cereal output by 1.1% from the previous year to 2,840 million metric tons thanks to increased maize supplies in Brazil, China and the United States.

Looking ahead to 2024, the UN agency pegged wheat output up 1 per cent from a year earlier at 797 million tons thanks to favourable weather in North America and top exporter Russia, as well as in China, India, Iran, Pakistan and Turkey.