Global Food Prices Rise Due to Production Difficulties

Global food prices continue to rise, a consequence of reduced production and high demand. According to the United Nations Food and Agriculture Organization (FAO), the food price index in March was recorded at 127.1, virtually unchanged from February.

This is reported by AgroReview

The decline in prices for grains and sugar offset the increase in the cost of meat and vegetable oils, leading to an overall index increase of 6.9% year-on-year, although it remains lower than the peak value recorded in March 2022 following Russia’s full-scale invasion of Ukraine.

Increase in Prices of Vegetable Oils and Dairy Products

The vegetable oil price index in March averaged 161.8 points, which is 3.7% higher than in February. This increase is driven by reduced supplies from major exporters, as well as sustained demand for these products.

The dairy product price index remained at 148.7 points, unchanged from February. However, butter prices increased by 3.9% due to high demand amid reduced supplies from Oceania and low production in Europe.

Changes in Grain and Meat Price Indices

The grain price index showed an average of 109.7 points, which is 2.6% lower than the previous month. The decline in global wheat prices occurred due to improved harvest forecasts in some major exporters in the Northern Hemisphere.

The meat price index rose to 118 points, which is 0.9% higher compared to February, primarily due to rising pork prices in the EU. At the same time, the sugar price index decreased to 116.9 points, which is 1.4% lower than in February, due to reduced global demand.

According to data from the State Statistics Service, the price of butter in Ukraine has increased by 32.2% over the year.

Expert Oleg Pendzin notes that the main reasons for the increase in dairy product prices are the rising costs of feed due to the low harvest in 2024 and the increase in electricity prices.