Global food commodity prices reach highest level since June 2014

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 118.5 points in March, 2.1% higher than in February 2021. While vegetable oils, meat and dairy witnessed the highest increases, sugar and cereal prices subsided.

The Cereal Price Index averaged 123.6 points in March, down 1.7% from February, ending the eight-month rising trend, but still 26.5% above its March 2020 level. Among major cereals, wheat export prices declined the most in March, falling 2.4%, however, they remained 19.5% higher than in the same month last year. The month-to-month decline in wheat prices mostly reflected generally good supplies and favorable production prospects for the 2021 crops. International maize and barley prices also fell in March, although continued strong import demand from China prevented them from falling more significantly, and sorghum prices even rose. Following three months of steady gains, international rice prices edged down in March.

The Vegetable Oil Price Index averaged 159.2 points in March, up 8% from February and marking its highest level since June 2011. The persistent strength of the index was driven by higher values of palm, soy, rape and sunflower oils. International palm oil prices rose for the tenth consecutive month as lingering concerns over tight inventory levels in major exporting countries coincided with a gradual recovery in global import demand.

The Dairy Price Index averaged 117.4 points in March, up 3.9% from February, rising for the tenth consecutive month and lifting the index to nearly 16% above its value in February 2020. In March, international butter prices rose, mainly underpinned by somewhat tight supplies in Europe due to a slow start to its milk production season and increased internal demand in anticipation of a foodservice sector recovery. Milk powder prices also rose, supported by a surge in imports in Asia, especially China, due to concerns over possible short-term sourcing challenges amidst seasonally declining milk production in Oceania and scarce shipping container availability in Europe and North America. Cheese prices fell slightly for a third consecutive month due to limited demand for spot supplies.

The Sugar Price Index averaged 96.2 points in March, down 4% from February, marking the first decline after sharp increases registered in the previous two months. Sugar quotations remained more than 30% above their levels in the corresponding period of last year, underpinned by concerns over tight global supplies in 2020/21. The recent monthly decline in international sugar price quotations was triggered by prospects of large exports from India, despite persisting logistical constraints.

The Meat Price Index averaged 98.9 points in March, up 2.3% from February, continuing the upward trend for the sixth consecutive month, but still 0.5% below its value one year ago. Poultry and pig meat quotations increased, underpinned by a fast pace of imports by Asian countries, mainly China. A surge in internal sales in Europe in preparation for the Easter celebrations also supported pig meat prices. Bovine meat prices remained steady at close to the February levels, as increases in quotations for Brazil and the United States of America compensated a decrease in export prices from Australia.