Adedapo Adesanya
By Adedapo Adesanya
Global food prices retreated slightly from their all-time high range since 1990 in April 2022, according to the United Nations Food and Agriculture Organisation (FAO).
The FAO Food Price Index (FFPI) averaged 158.5 points in April 2022, down 1.2 points (0.8 per cent) from the all-time high reached in March, though still 36.4 points (29.8 per cent) above its value in the corresponding month last year.
The drop in the FFPI in April was led by a significant downturn in the vegetable oil sub-index, along with a slight decline in the cereal price sub-index.
Meanwhile, sugar, meat and dairy price sub-indices sustained moderate increases.
The FAO Cereal Price Index averaged 169.5 points in April, down 0.7 points (0.4 per cent) from the record high reached in March (since 1990). After surging to a record level in March, international coarse grain prices dropped by 1.8 per cent in April, led by a 3.0 per cent decline in maize prices, as seasonal supplies from ongoing harvests in Argentina and Brazil helped ease the pressure on markets.
World sorghum prices also declined in April by 0.4 per cent, while tight supplies pushed barley prices up by 2.5 per cent. International wheat prices edged upwards in April, albeit marginally, gaining 0.2 per cent.
Continued blockage of ports in Ukraine and concerns over 2022 crop conditions in the United States of America kept prices elevated, but the price increases were moderated by larger shipments from India, higher-than-expected exports from the Russian Federation and slightly dampened global demand as a result of high prices.
International rice prices in April went up 2.3 per cent from their March levels, sustained by a combination of strong local demand from various Asian exporters, purchases by Near Eastern and Chinese buyers and weather setbacks in the Americas.
The FAO Vegetable Oil Price Index averaged 237.5 points in April, shedding 14.3 points (5.7 per cent) from the record high registered in March, but remaining markedly above its year-earlier level.
The decline was driven by lower world prices of palm, sunflower and soy oils, which more than offset higher rapeseed oil quotations. International palm oil prices dropped moderately in April, mainly weighed by subdued global import purchases amid high costs as well as a weakening demand outlook in China.
Nevertheless, uncertainties about export availabilities out of Indonesia, the world’s leading palm oil exporter, contained further declines in international prices. In the meantime, world sunflower and soy oil prices also fell month-on-month, largely tied to demand-rationing following the record high prices seen lately. By contrast, rapeseed oil prices stayed firm in April, sustained by lingering global supply tightness.
The FAO Dairy Price Index averaged 147.1 points in April, up 1.3 points (0.9 per cent) from March, marking the eighth consecutive monthly increase and lifting the index 28.0 points (23.5 per cent) above its value a year ago.
In April, the upward trend of dairy product prices continued, driven by the persistent global supply tightness, as milk output in Western Europe and Oceania continued to track below their seasonal levels.
International quotations for butter rose the most, reflecting tight supplies, including low inventories, especially in Western Europe, amidst a surge in demand for near-term deliveries, partly induced by the current shortage of sunflower oil and margarine.
Despite a decline in foreign purchases, sustained internal demand and low inventories in Europe provided support to world skim milk powder and cheese prices. By contrast, whole milk prices fell moderately, mainly due to a demand slowdown in China.
The FAO Meat Price Index averaged 121.9 points in April, up 2.7 points (2.2 per cent) from March and setting a new record high. The continued price strength stemmed from higher world poultry, pig and bovine meat prices.
The poultry meat price increase was driven by solid demand amidst tight global supplies, reflecting disruptions to exports from Ukraine and rising avian influenza outbreaks in the Northern hemisphere. Meanwhile, pig meat prices rose further, although less steeply than in March, on the prolonged low supply of slaughtered pigs in Western Europe and high internal demand in large producing countries.
World bovine meat prices increased moderately, reflecting high export volumes from Brazil, despite the low slaughter cattle supply. With this increase, bovine meat prices reached a new record high. Regarding ovine meat, the pandemic-related lockdowns and port delays in China eased the country’s meat purchases, pushing prices marginally lower.
The FAO Sugar Price Index averaged 121.8 points in April, up 3.9 points (3.3 per cent) from March, marking the second consecutive monthly increase and reaching levels more than 20 per cent above those registered in the corresponding month last year.
Higher ethanol prices in Brazil, coupled with the sustained strengthening of the Brazilian Real against the US Dollar, continued to underpin the increase in world sugar prices. Additional support was provided by concerns over the slow start of the 2022 harvest in Brazil.
However, larger-than-previously-anticipated availabilities in India, a major sugar exporter, bolstered the global supply outlook and prevented more substantial price increases.
