Global food prices rose for the first time in a year in April. This is reported by the United Nations Agriculture Organization (FAO) based on its calculations. The rise comes as the rampant increase in food costs begins to cool in some countries.
The indicator used by the FAO to measure price developments for grain, meat and vegetable oils, for example, rose by 0.6 percent to 127.2 points between March and April. The index for March was adjusted downwards to 126.5 points from a previously reported position of 126.9 points. Compared to the record level of March last year, prices are still about 20 percent lower. Shortly after the Russian invasion of Ukraine in February 2022, prices for the most important basic raw materials for food and drink rose to a record high.
The rise in prices in April could rekindle concerns about food inflation, which recently cooled in countries from Kenya to Germany and Australia. However, supermarket food prices remain historically high in many regions as retailers pass on higher energy, labour and transportation costs to customers.
The price increase in April was partly due to higher prices for sugar, meat and rice, which offset the price decreases for cereals, dairy and vegetable oil. For example, the sugar price index rose 17.6 percent in April to its highest since October 2011. According to the FAO, the increase in sugar prices is caused by concerns about tighter supplies in India and China, combined with lower-than-expected production in Thailand and the European Union.
The development of food prices will mainly depend on talks on extending the so-called grain deal with Russia, which allows exports from Ukrainian ports on the Black Sea. The grain deal was first agreed in July 2022 and has boosted supplies of wheat, corn and sunflower oil from war-torn Ukraine. However, Russia has threatened to pull out of the deal this month if problems related to grain and fertilizer shipments are unresolved.