Meals costs leap 20.7% yr/yr to hit report excessive in Feb, U.N. company says

Food prices jump 20.7% yr/yr to hit record high in Feb, U.N. agency says

Prospects stroll previous a fruit stall at a avenue market, in Mexico Metropolis, Mexico December 17, 2021. REUTERS/Luis Cortes/File Picture

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ROME, March 4 (Reuters) – (This March 4 story corrects to exchange year-on-year pct change in headline and first paragraph to twenty.7% from 24.1% after FAO issued an official correction)

World meals costs hit a report excessive in February, led by a surge in vegetable oils and dairy merchandise, to publish a 20.7% improve year-on-year, the U.N. meals company stated on Friday.

The Meals and Agriculture Group’s (FAO) food price index, which tracks essentially the most globally traded meals commodities, averaged 140.7 factors final month towards a downwardly revised 135.4 in January. That determine was beforehand given as 135.7.

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Larger meals costs have contributed to a broader surge in inflation as economies get well from the coronavirus disaster and the FAO has warned that the upper prices are placing poorer populations in danger in international locations reliant on imports.

FAO economist Upali Galketi Aratchilage stated issues over crop situations and export availabilities supplied solely a partial rationalization to the rise in world meals costs.

“A a lot greater push for meals value inflation comes from exterior meals manufacturing, significantly the vitality, fertilizer and feed sectors,” he stated. “All these elements are inclined to squeeze revenue margins of meals producers, discouraging them from investing and increasing manufacturing.”

Knowledge for the February report was largely compiled earlier than the Russian invasion of Ukraine. Considerations over tensions within the Black Sea space had been already weighing on agricultural markets even earlier than the violence flared, however analysts warn a chronic battle might have a significant influence on grain exports. read more

FAO stated its vegetable oils index rose 8.5% month-on-month in February to chalk up one other report excessive, propelled by rising palm, soy, and sunflower oil costs. Ukraine and Russia account for about 80% of world exports of sunflower oil.

The cereal value index rose 3.0% on the month, with maize costs up 5.1% and wheat costs growing 2.1%, largely reflecting uncertainty about world provide flows from Black Sea ports. read more

FAO’s dairy value index elevated 6.4%, its sixth consecutive month-to-month rise, underpinned by tight world provides, whereas meat costs rose 1.1% in February.

In contrast, sugar was the only real index to publish a lower, shedding 1.9% from the earlier month due partly to beneficial manufacturing prospects in main exporters India and Thailand.

FAO additionally issued its first projections for cereal output in 2022, seeing world wheat manufacturing rising to 790 million tonnes from 775.4 million in 2021, thanks partially to hopes of excessive yields and intensive planting in Canada, america and Asia.

The U.N. company cautioned nonetheless that its projections didn’t consider the doable influence of the battle between Russia and Ukraine.

FAO stated maize outputs in Argentina and Brazil in 2022 had been forecast at effectively above-average ranges, notably in Brazil the place the maize crop was seen reaching a report excessive 112 million tonnes.

World cereal utilization in 2021/22 was forecast to rise 1.5% above the 2020/21 stage, hitting 2.802 billion tonnes. FAO’s forecast for world cereal shares by the shut of seasons in 2022 stood at 836 million tonnes.

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Modifying by Crispian Balmer

Our Requirements: The Thomson Reuters Trust Principles.

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