Global food prices saw a notable uptick, marking the first increase since July, according to the latest report from the United Nations’ Food and Agricultural Organization (FAO).
The FAO’s overall Food Price Index climbed by 1.1 percent during the month, reaching 118.3 points. However, on an annual basis, the index remained 7.7 percent lower.
Notably, vegetable oils surged by 8.0 percent, hitting a one-year high. This increase was primarily driven by climbing prices of palm, soy, sunflower, and rapeseed oils. Seasonal drops in output from leading producing nations, coupled with robust demand in Southeast Asia, contributed to the rise in palm oil prices. Similarly, demand from the biofuel sector played a significant role in propelling soy oil prices upward. Dairy prices also experienced a notable increase of 2.9 percent in March, while meat prices climbed by 1.7 percent. In contrast, cereals prices declined by 2.6 percent on a monthly basis, while sugar prices fell by 5.4 percent.
The recent surge in food prices comes amidst slowed inflation in many countries. However, concerns have emerged following a recent rebound in global oil prices, raising apprehensions that inflation may persist at levels that could dissuade central banks from reducing interest rates.
This increase in food prices follows a period where they reached record highs, notably triggered by Russia’s invasion of Ukraine in February 2022. Since then, prices have gradually declined.
The FAO’s report underscores the complex interplay of factors influencing global food prices, from seasonal fluctuations to geopolitical tensions and shifts in demand patterns. As the world continues to navigate economic uncertainties, the trajectory of food prices remains a critical indicator for policymakers and consumers alike.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
9th April, 2024
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