War, Climate Disaster Push World Food Prices to Highest Levels in 2022

January 10, 2023
rising cost of food

By Adedapo Adesanya

Global prices for food commodities were on the highest levels in 2022 after falling for nine months in a row. The United Nations Food and Agriculture Organisation (FAO) attributed this to Russia’s war in Ukraine, droughts, and other factors, which drove up inflation and worsened hunger worldwide.

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, dipped by 1.9 per cent in December from a month earlier, the Rome-based organization said in its latest report.

For the whole year, it averaged 143.7 points, more than 14 per cent above the 2021 average, which also saw large increases.

World prices of wheat and maize reached record highs over the year. The average value of the FAO Vegetable Oil Price Index for all of 2022 reached a new record high, while the FAO Dairy Price Index and Meat Price Index marked their highest full-year levels since 1990.

The FAO Food Price Index averaged 132.4 points in December, 1.0 per cent below its value a year earlier. However, for 2022 as a whole, the index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 143.7 points, 14.3 per cent higher than the average value over 2021.

Speaking on this, FAO Chief Economist, Mr Maximo Torero, noted that the December number showed that calmer food commodity prices were welcome after two volatile years.

“It is important to remain vigilant and keep a strong focus on mitigating global food insecurity given that world food prices remain at elevated levels, with many staples near record highs, and with prices of rice increasing, and still many risks associated with future supplies,” he added.

Vegetable oil world quotations led the decrease, with the FAO Vegetable Oil Price Index down 6.7 per cent from November to reach its lowest level since February 2021. International quotations for palm, soy, rapeseed and sunflower seed oils all declined in December, driven by subdued global import demand and prospects of seasonally rising soy oil production in South America, as well as declining crude oil prices.

The FAO Cereal Price Index decreased by 1.9 per cent from November. Ongoing harvests in the southern hemisphere boosted wheat exportable supplies, while strong competition from Brazil drove down world maize prices. Conversely, international rice prices rose, buoyed by Asian buying and currency appreciation against the United States dollar for exporting countries.

The FAO Meat Price Index in December dropped by 1.2 per cent from November, with lower world prices of bovine and poultry meats outweighing higher pig and ovine meat prices. International bovine meat prices were impacted by lacklustre global demand for medium-term supplies, while more-than-adequate export supplies pushed down poultry meat prices. Pig meat prices rose on the back of strong internal holiday demand, especially in Europe.

The Dairy Price Index increased by 1.2 per cent in December, following five months of consecutive declines. Higher international cheese prices, reflecting tightening market conditions, drove the monthly increase in the index, while international quotations for butter and milk powder declined.

The Sugar Price Index also rose, increasing by 2.4 per cent from November, mostly due to concerns over the impact of adverse weather conditions on crop yields in India and sugarcane crushing delays in Thailand and Australia.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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