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May 6, 2022updated 12 May 2022 10:35am

UN food price index dips in April

The Food and Agriculture Organization reported “modest declines” in the prices of vegetable oils and cereals.

By Dean Best

World food commodity prices “eased” in April, according to the UN’s index of a basket of key crops.

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  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
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The FAO Food Price Index averaged 158.5 points in April, down 0.8 percent from March’s all-time high.

Behind the slight decline lay a drop in the Food and Agriculture Organization’s index of vegetable-oil prices and a dip in its cereal index.

Nevertheless, the FAO said its overall Food Price Index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, remained 29.8% higher in April than in the same month last year.

“The small decrease in the index is a welcome relief, particularly for low-income food-deficit countries, but still food prices remain close to their recent highs, reflecting persistent market tightness and posing a challenge to global food security for the most vulnerable,” FAO Chief Economist Máximo Torero Cullen said.

There was a 5.7% fall in the FAO’s Vegetable Oil Price Index in April. The FAO said the decrease meant vegetable oil prices had shedded almost a third of the increase registered in March. It pointed to “demand rationing” pushing down prices for palm, sunflower and soy oils.

That said, the organisation said uncertainty about shipments from Indonesia, the world’s leading palm oil exporter, limited any further declines in international prices. Last week, Indonesia announced a ban on palm-oil exports.

Elsewhere, the FAO’s Cereal Price Index fell by 0.7 points in April, amid a 3% decline in world maize prices.

The FAO said wheat prices inched up 0.2% as larger shipments from India and higher-than-expected exports from Russia “tempered” the impact of blockages at ports in Ukraine and crop conditions in the US.

The organisation’s Meat Price Index increased 2.2% from March, hitting a new high, as prices rose for poultry, big and bovine meat. Poultry meat prices were affected by disruptions to exports from Ukraine and avian influenza outbreaks in the Northern hemisphere.

Sugar prices were up 3.3%, buoyed by higher ethanol prices and concerns over the slow start of the 2022 harvest in Brazil, the world’s largest sugar exporter, the FAO said.

Its Dairy Price Index inched up 0.9%, amid tightness in supply as milk output in western Europe and Oceania “continued to track below their seasonal levels”.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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