The FAO’s cereals price index registered a notable decline of 15.4 percent, reflecting well-supplied global markets compared to the previous year’s surge in prices triggered by Russia’s invasion of Ukraine. Supply concerns eased for wheat and maize but increased for rice due to the impact of the El Nino weather phenomenon and India restricting exports, causing rice prices to jump by 21 percent in the past year.
The vegetable oil price index experienced the most substantial fall, dropping by 32.7 percent, attributed to improved supplies and a reduction in biofuel production. On the contrary, sugar prices saw an overall increase of 26.7 percent, although they retreated from their December highs due to increased exports by Brazil and reduced biofuel usage.
Despite the decline in the FAO’s overall index, consumer food prices are rising in many countries, often surpassing the overall inflation rate. Economist and food industry specialist Bruno Parmentier emphasized that a drop in food commodity prices does not necessarily translate to a decrease in food prices for consumers, as other factors such as labor and production costs significantly contribute to the final product prices.
