New York, Europe Brief News – The UN’s February World Food Price Index averaged 140.7 points last month, or nearly 4% up from January.
This is also 24.1 per cent over the level a year earlier and 3.1 points higher than in February 2011.
“Concerns over crop conditions and adequate export availabilities explain only a part of the current global food price increases. A much bigger push for food price inflation comes from outside food production, particularly the energy, fertilizer and feed sectors,” said FAO economist Upali Galketi Aratchilage.
“All these factors tend to squeeze profit margins of food producers, discouraging them from investing and expanding production.”
As the Food Price Index measures average prices over the month, the February reading only partly incorporates market effects stemming from the conflict in Ukraine.
Rise in demand
The overall rise last month was driven by an 8.5% increase in the FAO Vegetable Oils Price Index.
This was mostly due to sustained global import demand, which coincided with a few supply-side factors, such as lower soybean production prospects in South America.
The Dairy Price Index averaged 6.4 per cent higher in February than January, supported by lower-than-expected milk supplies in Western Europe and Oceania, as well as persistent import demand, especially from North Asia and the Middle East.
Last month, the Cereal Price Index increased 3.0 per cent over January. Contributing factors included rising quotations for maize and other coarse grains, caused by continued concerns over crop conditions in South America, uncertainty about maize exports from Ukraine, and rising wheat export prices.
Strong global import demand contributed to the 1.1 per cent rise in the Meat Price Index. Other factors included tight supplies of slaughter-ready cattle in Brazil and a high demand for herd rebuilding in Australia.
The FAO Sugar Price Index declined by nearly 2% amid favourable production prospects in India, Thailand and other major exporters, as well as improved growing conditions in Brazil.
