Against the background of the war in Ukraine, that made it difficult to trade wheat, corn and sunflowers, the Staple food prices broke records in 2022, pointed out on Friday Food and Agriculture Organization of the United Nations (FAO).
(See: How much are they worth? The most expensive products in the country at the beginning of 2023).
The invasion of Ukraine by Russia, fifth and first world exporters of wheat, respectively, with 30% of the world supply, since February 2022 plunged the food markets into an era of uncertainty.
A few days after the start of the Russian offensive, on February 24, world food prices in March reached their “highest levels ever recorded“.
In 2022, the food price index, which follows the variation in the international values of a basket of basic products, was established at 143.7 points on average, “that is, 14.3% more than the average value of 2021“, indicated the international organization.
(See: ‘Shameful’: Minagricultura talks about food insecurity in the country).
Cereals in Ukraine.
The previous record dated back to 2011, when there was a food crisis and famine riots in Africa, reaching an index of 131.9 points.
The invasion of Europe’s ‘wheat barn’ has highlighted fragilities and dependencies, especially of poor countries, prompting fears about A new world food crisis.
The worst case scenario, with “famine hurricanes“, as the UN feared, was averted thanks to the resumption of Ukrainian exports in the second half of 2022, but prices will remain high in 2023, always amid strong volatility.
(See: Food insecurity hits more than 10 million in Latin America).
“World wheat and corn prices hit record levels” in 2022, stressed the FAO.
In the European market, wheat rose as high as 438 euros ($463) per tonne on May 16, after starting the year at 270 euros ($285).
With always abnormal volatility, it stood at around 315 euros (333 dollars) at the end of December, which represents an increase of almost 17% in one year.
As Ukraine is also a major producer of sunflower oil, the average value of the FAO Vegetable Oil Price Index also broke a record through 2022.
The prices of the meat and the dairy products, for their part, they reached “the highest annual levels since 1990“, according to the UN agency.
The price of food fell again in April and declined steadily over the past nine months.
(See: Tax reform: food that will be taxed in 2023).
The December 2022 FAO Index, averaging 132.4 points, fell by 1.9 percent in one month and even dipped below its level of a year ago.
The tension eased further in July after the signing of an agreement to resume Ukrainian wheat exports to the Black Sea.
Ukraine is one of the countries that exports the most cereals.
A hard-traded ‘broker’ under the auspices of the UN, which allowed 15 million tons of cereals and oilseeds to be removed from the silos.
“It’s a good thing that food prices are calming down after two very volatile years“, said Máximo Torero, chief economist of the FAO, adding that it is essential “stay vigilant and focus on mitigating global food insecurity“.
Torero warned that world food prices “remain high, with many commodities near record levels, rising rice prices, and many risks associated with future supply“.
World wheat stocks are highest among exporters, according to the firm Agritel, but 35% are in Russia, which has harvested more than 100 million tons of wheat and thus confirms its position as arbitrator.
(See: Due to the rains, food prices would increase).
In December 2022, the vegetable oil price index decreased by 6.7% from November, falling to its lowest level since February 2021. E
l of cereals decreased by 1.9% compared to the month of November, due to a greater availability of wheat after the harvests in the southern hemisphere and due to a drop in world corn prices.
AFP
