FAO Report World Food Prices Went Up By 20.7% To Hit Record-Breaking High In February

The United Nations (UN) Food and Agriculture Organisation (FAO) has proclaimed that global food prices reached a new high in February, rising 20.7 per cent year on year, owing to increases in the prices of vegetable oils and dairy products.

The Food and Agriculture Organisation's food price index, which tracks the most widely traded food commodities worldwide, rose 3.9 per cent in February. Rising food prices have contributed to a broader inflation spike as economies recover from coronavirus. The FAO has alarmed that the higher costs put poorer populations at risk in import-dependent countries.

Russia-Ukraine War Results Increase in Food Inflation

Russia and Ukraine account for approximately 29 per cent of global wheat exports, 19 per cent of corn exports, and 80 per cent of sunflower oil exports, which compete with soy oil. According to the FAO's report, the February price increases can be attributed to crop conditions and reduced export availability. Increases in other commodity costs, on the other hand, played a role.

According to FAO economist Upali Galketi Aratchilage, concerns about crop conditions and export availability accounted for only a portion of the rise in global food prices. As economists stated, "A much bigger push for food price inflation comes from outside food production, particularly the energy, fertilizer, and feed sectors," he said.

"All these factors tend to squeeze profit margins of food producers, discouraging them from investing and expanding production." as reported by The Hindu.

Alarming Food Crisis In The World

The United Nations warned that its projections did not account for the potential impact of the conflict between Russia and Ukraine. According to FAO, maize outputs in Argentina and Brazil in 2022 are expected to be well above average, particularly in Brazil, where the maize crop is expected to reach a record high of 112 million tonnes.

The world cereal utilisation rate in 2021/22 is expected to be 1.5 per cent higher than in 2020/21, reaching 2.802 billion tonnes. The FAO forecasted 836 million tonnes of global cereal stocks by the end of the season in 2022.

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