World food prices hit record high in 2022
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World prices of maize were 24.8 per cent higher on average in 2022 than in 2021.
PHOTO: NYTIMES
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PARIS – World food prices fell for a ninth month in a row in December, but hit their highest level on record for the full year in 2022, United Nations data showed on Friday.
Food prices soared to a monthly record high in March after Russia on Feb 24 invaded
But prices have dropped since then, with more relief brought by a deal brokered by Turkey and the UN
The UN Food and Agriculture Organisation (FAO) said on Friday that its price index, which tracks the monthly change in international prices of a basket of food commodities, fell to 132.4 points in December, a 1.9 per cent drop from November.
It was also 1 per cent lower than in December 2021.
Prices still remain well above their 10-year average, which has added to a global cost-of-living crunch and exacerbated a hunger crisis that the UN has aimed to quash by the end of the decade.
For 2022 as a whole, the index averaged 14.3 per cent higher compared with the previous year, as it reached an all-time high of 143.7 points.
The index had already gained 28 per cent in 2021 from the previous year as the world economy recovered from the impact of the Covid-19 pandemic.
The gauge tracks shifts in commodity costs and it takes a little while for changes to filter through to retail prices, which have been pushed up by rising energy and labour costs.
“Calmer food commodity prices are welcome after two very volatile years,” FAO chief economist Maximo Torero said in a statement.
“It is important to remain vigilant and keep a strong focus on mitigating global food insecurity given that world food prices remain at elevated levels,” he said.
Food inflation has been running hot in countries from Britain to Pakistan and Brazil.
“We are still seeing a lot of really high prices in a lot of the major food commodities,” Ms Erin Collier, an economist at the FAO, said in an interview. “Supplies are boosted right now, but there are definitely still a lot of factors that are risks and could be further exacerbated at any point.”
Dr Torero said many staples are near record highs, with prices of rice rising and “still many risks associated with future supplies”.
World prices of maize were 24.8 per cent higher on average in 2022 than in 2021, according to the FAO. Wheat was 15.6 per cent more expensive. But maize prices fell in December, mostly due to “strong competition” from Brazil, the FAO said.
Wheat prices were also down for the month “as ongoing harvests in the Southern Hemisphere boosted supplies and competition among exporters remained strong”.
The FAO’s vegetable oil price index reached a new record high in 2022, but fell 6.7 per cent month on month in December to its lowest level since February 2021.
Dairy and meat prices hit their highest levels since 1990, the agency said. While meat prices fell 1.2 per cent in December, those of dairy rose 1.1 per cent for the month.
Prospects for 2023 hinge on beneficial weather to boost strained crop stockpiles. The war in Ukraine, which is nearing its one-year mark, is also hampering the finances of Ukrainian farmers and forcing them to leave some land unsown.
Other major growers have suffered drought, flooding and freezes. Disease outbreaks and herd cutbacks are restraining meat output, and sugar futures recently hit the highest since early 2017.
Brazil is set to reap a bumper soya bean crop and Russia is exporting large wheat volumes, keeping prices in check as 2023 kicks off.
The economic downturn could also force consumers to cut back, pressuring food prices this year, Rabobank said in November. AFP, BLOOMBERG
