Global food commodity costs extended a run of declines in March and are now more than 20% below a historical peak reached a year ago.

Cereals and vegetable oils led the drop in the Food and Agriculture Organization of the United Nations’ measure of food commodity costs, which fell for a 12th straight month in March. The FAO Food Price index averaged 126.9 points, its lowest level since July 2021.

The index of six commodities declined 20.5% from March last year when it reached 159.7, the highest in the FAO’s records dating back to 1990. On a month-on-month basis, the measure dipped 2.1% from February.

“A mix of ample supplies, subdued import demand and the extension of the Black Sea Grain Initiative contributed to the drop,” the FAO said, referring to last month’s extension of the deal by Russia permitting shipments out of Ukraine ports.

However, prices still remain elevated in historical terms, FAO chief economist Máximo Torero pointed out. The Food Price Index has been above the 100 marker since October 2020 when it averaged 101.40, compared to 98 in September of that year.

“While prices dropped at the global level, they are still very high and continue to increase in domestic markets, posing additional challenges to food security,” Torero said in a statement. “This is particularly so in net-food-importing developing countries, with the situation aggravated by the depreciation of their currencies.”

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By GlobalData

The FAO’s sub-gauge of cereals dropped 5.6% from February as international prices of wheat fell 7.1%, the FAO said. Maize prices declined 4.6% and rice was down 3.2%.

Vegetable oils decreased 3% and are 47.7% off their peak in March last year “as ample world supplies and subdued global import demand pushed down soy, rapeseed and sunflower oil quotations”, the FAO noted.

Dairy prices declined 0.8% in March from a month earlier but butter prices rose “due to solid import demand”.

Meat and sugar prices bucked the easing trend. The protein gauge climbed 0.5% led by cow and pig meat prices, while poultry costs fell.

“Despite avian influenza outbreaks in several large exporting countries, world poultry meat prices fell for the ninth consecutive month on subdued global import demand,” the FAO said.

Sugar prices, meanwhile, increased 1.5% from February, with the sub-measure for sugar reaching the highest level since October 2016, “reflecting concerns over declining production prospects in India, Thailand and China”.