Food prices slightly increased in April

Food prices slightly increased in April as the rise in meat, vegetable oils, and cereals outweighed the decrease in sugar, milk, and dairy products, the Food and Agriculture Organization of the United Nations (FAO) reported on Friday.

The FAO’s index of the price of a basket of staple food products rose by 0.3 points in April compared to the revised value for March, averaging 119.1 points. This means that they increased by 0.3 percent on a monthly basis.

In March, the basket of staple food products increased on a monthly basis for the first time since September 2023, by 1.2 percent, according to FAO data.

Compared to April of last year, prices were down by 9.6 percent.

The most significant monthly increase in April was in meat, which rose by 1.6 percent compared to March, reflecting higher prices for poultry, beef, and lamb.

Cereals and vegetable oils also saw a slight increase of 0.3 percent compared to March. Wheat prices stabilized in April as strong competition among major exporters eased concerns about unfavorable growing conditions in certain parts of the European Union, Russia, and the U.S.

Corn prices increased due to strong demand coinciding with logistical issues in Ukraine due to damaged infrastructure, along with concerns for Brazilian production. Rice, on the other hand, decreased by 1.8 percent, mainly due to a good harvest index.

Sugar prices fell by 4.4 percent compared to March, mainly due to improved production prospects in India and Thailand and better weather conditions in Brazil. Compared to April of last year, prices are down by 14.7 percent.

Dairy products decreased by 0.3 percent compared to March, reflecting weak import demand for skimmed milk powder and lower cheese prices under pressure from a stronger dollar. Butter, however, increased in price due to continuously strong import demand.

Stagnation in wheat production

In a separate report on supply and demand in the grain markets, the FAO again marginally raised its estimate of global grain production for the 2023/2024 season to 2.846 billion tons. This would mean an increase of 1.2 percent compared to the previous season.

They also marginally raised the forecast for grain consumption in the 2023/2024 season, estimating it will amount to 2.83 billion tons, which, according to new calculations, would represent an increase of 1.4 percent compared to the 2022/2023 season.

This would mean that grain stocks at the end of this summer’s season should be 2.1 percent higher than at the beginning, reaching 890 million tons. However, this figure is four million tons lower than the FAO forecasted in the April report.

Global grain trade is expected to increase by 1.6 percent this season, according to new FAO calculations, reaching 487 million tons, with a larger volume of trade in coarse grains, such as corn, and a slightly smaller volume of wheat trade.

The estimate for this year’s wheat production has been slightly lowered again to 791 million tons, which would mean it would remain roughly at last year’s level. Previous estimates indicated a 1 percent increase.