As the war in Ukraine continues, despite Russia withdrawing from Kyiv, both lives and livelihoods are lost. As the war sees no end in sight as yet, though we remain positive that it could be around the corner, food prices have hit an “all-time high in March.” The Food and Agricultural Organization (FAO) of the United Nations has released its FAO Food Price Index (FFPI) which indicates that prices have risen in the indexes of all food commodities.
The FFPI measures the monthly change in international food prices of five major commodity groups. In March 2022, the FFPI average was 159.3 points, an increase of 17.9 points or 12.6 percent when compared with the average last month. This is the highest level since 1990, when the index was introduced by the World Food Body.
Although the prices of all food groups have increased in the month, vegetable oils, cereals and meat sub-indices have reached all time high levels. Prices of sugar and dairy products have also increased considerably.
The FAO monitors rise in the following food commodities each month
The FAO Food Price Index
The FAO Cereal Price Index
The FAO Vegetable Oil Price Index
The FAO Dairy Price Index
The FAO Meat Price Index
The FAO Sugar Price Index.
The Cereal Price Index was was up by 24.9 points, which is a 17.1 increase from last month. The conflict in Ukraine led to a decrease in exports from Ukraine and to some extent the decrease in exports from the Russian federation, as well. Reduced maize exports from Ukraine as well as increase in energy costs were the major reasons behind the surge in coarse grains prices as prices of other grains such as sorghum and barley also increased due to the tight supply of maize. Rice prices remained fairly stable.
The Vegetable Oil Price Index saw a increase of 46.9 points which is a 23.2 percent increase in March. There is a major surge in price increase in all vegetable oils as reduced supplies in sunflower oil lead to an increased demand in rapeseed, soy and palm oil. Volatility in the crude oil market also lead to an increase in vegetable oil prices.
The FAO Dairy Price Index increased by 2.6 percent while the FAO Meat Price Index increased by 4.8 percent from February. The FAO Sugar Price Index increased by 6.7 percent from the prices last month.