According to the U.N. Food and Agriculture Organization, global food prices for commodities such as grains and vegetable oils reached their highest levels ever last year despite decreasing for nine straight months as a result of the Russian military campaign in Ukraine, a drought, and other factors that caused inflation to increase and exacerbate hunger around the world.
According to the Rome-based FAO, which records monthly changes in the prices of frequently traded food commodities on the worldwide market, prices fell 1.9% in December from a month earlier. It averaged 143.7 points for the whole year, more than 14% over the 2021 average, which also experienced significant rises.
The decline in December was mainly caused by a drop in the price of vegetable oils due to a decrease in import demand, increasing soy oil output projections in South America, and lower crude oil prices. While Sugar and dairy saw a tiny increase, meat and grain also declined.
“After two years of extreme volatility, lower food commodity prices are welcome,” according to the head economist of the FAO, Maximo Torero. “Given that world food prices continue to be high, that many staples are close to record highs, that rice costs are rising, and that there are still numerous concerns related to the future supply, it is necessary to be attentive and have a strong focus on alleviating global food supplies.”
According to FAO data, last year, the United Nations Organization’s Food Price Index reached its highest level since records started in 1961.
Russia’s invasion of Ukraine in February worsened a food crisis because the two countries were key worldwide producers of barley, wheat, sunflower oil, and other items, particularly to countries in the Middle East, Africa, and Asia that were already facing food insecurity.
Food prices reached record highs as a result of the disruption of crucial Black Sea supplies, which increased poverty, inflation, and food insecurity in poor countries that depend on imports.
The energy markets and fertilizer supply, both crucial to the production of food, were also shaken by the war. There have also been climatic shocks that have exacerbated famine in regions like the Horn of Africa. The greatest drought in decades is severely affecting Somalia, Ethiopia, and Kenya, and the U.N. has issued a famine alert for areas of Somalia. Already, thousands of people have died.
Wheat and corn prices reached record highs last year, according to the FAO, albeit they declined in December along with the price of other grains. It said that crops in the Southern Hemisphere increased supply and that exporters faced fierce competition.
The Vegetable Oil Price Index for the organization reached a record high in 2017 while declining in December to its lowest point since February 2021. The FAO Meat Price Index and Dairy Price Index both reached their highest levels since 1990 for the whole year of 2022.