The war between Russia and Ukraine is causing international prices of wheat, corn and vegetable oils to rise dramatically.
According to the latest index of the UN Food and Agriculture Organization (FAO), these prices have reached their highest levels ever recorded.
The UN agency says the war between Russia and Ukraine is causing shocks in the markets for basic grains and vegetable oils. The Russian Federation and Ukraine together accounted for about 30 percent of world wheat exports and 20 percent of world maize exports over the past three years.
As a result, the FAO Food Price Index averaged 159.3 points in March, an increase of 12.6 percent since February, when it reached its highest level since its inception in 1990. The Index tracks the monthly change in international prices of a basket of commonly traded food products. The last level of the Index was already 33.6 percent higher than in March 2021.
In March, the Index was up 17.1 percent from February, driven by sharp increases in the prices of wheat and all coarse grains mainly due to the war in Ukraine.
World wheat prices climbed 19.7 percent during the month, with concerns about crop conditions in the United States of America adding to the increase. Meanwhile, maize prices rose by 19.1 percent on a monthly basis, reaching a record high, as did barley and sorghum prices.
Contrasting trends for rice of different origins and qualities have caused little change in the FAO Rice Price Index since February, which remains 10 percent lower than a year earlier.
For vegetable oils, prices increased by 23.2 percent, driven by higher prices for sunflower oil, whose largest exporter is Ukraine. Prices for palm, soybean and rapeseed oils also rose sharply due to higher sunflower oil and crude oil prices. Fears of reduced exports to South America also contributed to the rise in soybean oil prices.
For its part, the FAO Sugar Price Index has risen by 6.7 percent since February, offsetting recent declines and bringing it to a level 20 percent higher than in March 2021. A factor in this increase was higher crude oil prices, as was the appreciation of the Brazilian real, while favorable production prospects in India prevented a larger monthly price increase.
For meat prices, the Index gained 4.8 percent in March and reached its highest level on record, mainly driven by a surge in hog meat prices due to a shortage of slaughter hogs in Western Europe. International poultry prices also strengthened as supplies declined in major exporting countries following avian influenza outbreaks.
The FAO Dairy Price Index rose by 2.6 percent and reached a level 23.6 percent higher than in March 2021, as butter and milk powder prices rose sharply amid strong import demand for short- and long-term deliveries, particularly in Asian markets.
TE/lb/abj/APA