Global food prices hit record high on Russia-Ukraine war – FAO

Global food commodity prices in March 2022 averaged 159.3 points, up 12.6 percent from February, making it the highest level since 1990, the Food and Agriculture Organization of the United Nations (FAO) reported today.

According to the FAO Food Price Index (FFPI), the global prices made a significant leap in March to reach its highest levels ever, as war in the Black Sea region spread shocks through markets for staple grains and vegetable oils

“The latest increase reflects new all-time highs for vegetable oils, cereals and meat sub-indices, while those of sugar and dairy products also rose significantly,” FAO stated.

The FFPI, a measure of the monthly change in international prices of a basket of food commodities, consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.

A breakdown of the FFPI shows that the cereal price index averaged 170.1 points in March, up 24.9 points from February, marking its highest level on record since 1990.

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“This month’s increase reflected a surge in world prices of wheat and coarse grains, largely driven by conflict-related export disruptions from Ukraine and, to a lesser extent, the Russian Federation,” it explained.

“Vegetable oil price index averaged 248.6 points in March, up 46.9 points from February, hitting a new record high.

“The sharp rise of the index was driven by higher sunflower, palm, soy and rapeseed oil prices.”

Dairy price index averaged 145.2 points in March, up 3.7 points from February, marking the seventh consecutive monthly increase and lifting the index 27.7 points above its value a year ago.

Meat price index averaged 120.0 points in March, up 5.5 points from February, also reaching an all-time high. Sugar price index averaged 117.9 points in March, up 7.4 points from February, reversing most of the previous three months’ decline and reaching levels more than 20 percent above those registered in the corresponding month last year.

“The March rebound in international sugar price quotations was mainly prompted by the sharp increase in international crude oil prices, which raised expectations of a greater use of sugarcane for ethanol production in Brazil in the upcoming season.”

Already, experts have forecasted that Nigeria will see a 50 percent rise in the prices of rice, maize and wheat before the end of 2022 as fertiliser shortage, surging diesel prices, and the Russia-Ukraine war have disrupted supplies.

Currently, a 50kg bag of urea fertilizer now sells for between N16,500 and N17,000 as against N10,500 and N11,000 last year, indicating a 54.5 percent increase in price, while NPK fertiliser now sells for between N15,000 and N19,000 as against N10,000 last year, a 90 percent rise in price.