Global Food Prices May Rise Further if West Asia Conflict Persists, FAO Warns
NEW DELHI — Global food commodity prices could rise further if the conflict in West Asia extends beyond 40 days, the Food and Agriculture Organization of the United Nations warned, citing growing pressure from higher energy costs on agricultural production.
The FAO said its Food Price Index averaged 128.5 points in March, up 2.4 percent from February and 1 percent higher than a year earlier, marking the second consecutive monthly increase.
“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.
“But if the conflict stretches beyond 40 days with high input costs with current low margins, farmers will have to choose: farm the same with fewer inputs, plant less, or switch to less intensive fertiliser crops. Those choices will hit future yields and shape our food supply and commodity prices for the rest of this year and all of the next,” he added.
The FAO Cereal Price Index rose 1.5 percent from the previous month, led by a 4.3 percent increase in global wheat prices due to drought concerns in the United States and expectations of reduced planting in Australia linked to higher fertilizer costs.
Maize prices edged up slightly, supported by rising energy prices and demand for ethanol, though ample global supplies limited gains. In contrast, the FAO All-Rice Price Index declined 3 percent, reflecting harvest cycles, weaker import demand, and currency movements.
Vegetable oil prices climbed 5.1 percent in March and were 13.2 percent higher than a year earlier, with increases across palm, soy, sunflower, and rapeseed oils driven by stronger biofuel demand linked to higher crude oil prices.
The FAO Meat Price Index rose 1 percent, supported by higher pig meat prices in the European Union and increased bovine meat prices in Brazil amid tighter cattle supplies. Prices for ovine and poultry meat declined, partly due to logistical constraints affecting markets in the Near East.
Dairy prices rose 1.2 percent, while sugar prices surged 7.2 percent, driven by expectations that Brazil would divert more sugarcane to ethanol production as oil prices increase, despite favorable harvest conditions in India and Thailand.
The FAO said global wheat production is forecast at 820 million tonnes, down 1.7 percent from the previous year, with most of the crop already planted. (Source: IANS)
