Global food prices may rise if West Asia crisis lasts beyond 40 days: FAO
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New Delhi: Global food commodity prices rose in March for the second consecutive month, largely driven by higher energy costs linked to escalating tensions in West Asia, the Food and Agriculture Organisation of the United Nations (FAO) reported on Friday.
The FAO Food Price Index, which tracks monthly changes in internationally traded food commodities, averaged 128.5 points in March, up 2.4 per cent from February and 1.0 per cent above its level a year ago.
“Price rises since the conflict began have been modest, driven mainly by higher oil prices and cushioned by ample global cereal supplies,” said FAO Chief Economist Maximo Torero.
He warned, “If the conflict stretches beyond 40 days, with high input costs and low margins, farmers may have to farm with fewer inputs, plant less, or switch to less intensive fertiliser crops. These choices could reduce future yields and affect food supply and commodity prices for the rest of this year and the next.”
The FAO Cereal Price Index rose 1.5 per cent from February, primarily due to higher world wheat prices, which climbed 4.3 per cent following drought-related deterioration of crop prospects in the United States and expectations of reduced plantings in Australia due to rising fertiliser costs. Global maize prices edged slightly higher, as ample availability offset concerns over fertiliser affordability and rising ethanol demand linked to higher energy prices.
Meanwhile, the FAO All-Rice Price Index fell 3.0 per cent, driven by harvest timing, weaker import demand, and currency depreciation against the U.S. dollar.
The FAO Vegetable Oil Price Index surged 5.1 per cent from February, standing 13.2 per cent higher than a year ago, reflecting rising international prices for palm, soy, sunflower, and rapeseed oils, driven by higher crude oil prices and expected demand for biofuels.
The FAO Meat Price Index increased 1.0 per cent, led by rising pig meat prices in the European Union due to seasonal demand and higher bovine meat prices in Brazil amid limited exportable supplies. Ovine and poultry meat prices declined partly because of logistical constraints in the Near East.
The FAO Dairy Price Index rose 1.2 per cent, while the Sugar Price Index jumped 7.2 per cent, as expectations that Brazil would divert more sugarcane to ethanol production outweighed generally favourable supply conditions, including good harvests in India and Thailand.
With most of the world’s wheat already planted, FAO forecasts global wheat harvests at 820 million tonnes, a 1.7 percent decline from last year.
With IANS inputs