Paris.- Staple food prices in 2022 were 14.3 percent higher than the average value of the previous year and surpassed the previous record set in 2011, figures from the Food and Agriculture Organization of the United Nations (FAO) revealed yesterday.
The war in the Ukraine made it difficult to trade wheat, corn, and sunflowers. Russia and Ukraine are the world’s first and fifth wheat exporters, respectively, with 30 percent of the world’s supply.
A few days after the start of the Russian offensive, on February 24, world food prices reached their “highest levels ever recorded” in March, the FAO said.
The world has not faced such a situation since 2011, when there was a food crisis and famine riots in Africa.
Although the index fell 1.9 percent in December, Máximo Torero, FAO chief economist, warned that world food prices “remain high, with many basic products close to record levels, rising rice prices, and many risks associated with future supply.”
The invasion of Europe’s wheat barn has highlighted fragilities and dependencies, especially of poor countries, prompting fears of a new global food crisis.
The worst scenario, with “famine hurricanes”, as the UN feared, was avoided thanks to the resumption of Ukrainian exports this summer, but prices will remain high in 2023, always amid strong volatility.
“World prices for wheat and corn reached record levels” in 2022, the FAO stressed this Friday.
In the European market, wheat rose as high as 438 euros ($463) per tonne on May 16, after starting the year at 270 euros ($285). With always abnormal volatility, it stood at around 315 euros (333 dollars) at the end of December, representing an increase of almost 17 percent in one year.
As Ukraine is also a major producer of sunflower oil, the average value of the FAO Vegetable Oil Price Index also broke a record throughout the year.
Meat and dairy prices, meanwhile, reached “the highest annual levels since 1990,” according to the UN agency.
Russia as referee
Food prices fell again in April and have declined steadily for the past nine months. The December 2022 FAO Index, averaging 132.4 points, fell by 1.9 percent in one month and even dipped below its level of a year ago.
The tension eased further in July after the signing of an agreement to resume Ukrainian wheat exports to the Black Sea. A “corridor” hard negotiated under the auspices of the UN, which allowed 15 million tons of grains and oilseeds to be removed from the silos.
“It is good that food prices are calming down after two very volatile years,” said Máximo Torero, adding that it is essential to “stay alert and focus on mitigating global food insecurity.”
World wheat stocks are the highest among exporters, according to the firm Agritel, but 35 percent are in Russia, which has harvested more than 100 million tons of wheat, thus confirming its arbitrator position.
In December 2022, the vegetable oil price index declined by 6.7 percent from November, falling to its lowest level since February 2021.
That of cereals decreased by 1.9 percent compared to the month of November, due to a greater availability of wheat after the harvests in the southern hemisphere and due to a drop in world corn prices.
