Vegetable oil, cereal and dairy products contributed the most to the decline in average prices, while sugar and meat prices increased.
In May 2023, the core index of world food prices fell to the lowest level in the last two years. Reason: Major drop in price quotes for most cereals, vegetable oils and dairy products. This is evidenced by data from FAO (Food and Agriculture Organization of the United Nations).
food price index
The last month of spring averaged 124.3 points, which is 2.6% from April and 22.1% below the historical maximum. It was recorded in March last year.
Grain price index
It decreased by 4.8% compared to April. Reason: 9.8% collapse of world corn quotas. World wheat prices also fell by 3.5% after adequate stocks and the new extension of the Black Sea Grain Initiative.
Vegetable oil price index
In May, its indicator fell by 8.7%. On average, this indicator is 48.2% lower than the level of the previous year.
Milk Price Index
The 3.2 percent decline from April was driven by the sharp drop in world cheese prices, mainly due to the availability of adequate export supplies against the backdrop of seasonally high milk production in the northern hemisphere.
sugar price index
It’s growing for the fourth month in a row. In May, the index increased by 5.5% compared to April, reaching a level about 31% higher than the previous year.
The leap reflects more limited availability worldwide and reflects growing concerns about the impact of the phenomenon.
Surface water heating in the tropical Pacific
“> El Niño for next season’s harvest.
price index for meat FAO also rose 1% in May.
What about prices in Ukraine
The Central Bank had previously predicted that food inflation would maintain its high level in 2023 due to the unstoppable increase in fruit and vegetable prices and the increase in fuel prices in the second half of the year.
The regulator believes the relatively inexpensive feed will keep the prices of livestock products. In the coming years, as security risks decrease, food inflation will fall sharply for the following reasons:
- restoration of technological and logistical ties;
- increased productivity;
- World food and energy prices are expected to decline.
This will outweigh the impact of the recovery in consumer demand, including the return of migrants.
By the way, Daniil Getmantsev, chairman of the Verkhovna Rada committee on tax and customs policy, believes that the drop in prices for Ukraine as an exporter of agricultural products is not good news, but you should not worry about it.
“But overall, the situation should be handled calmly – all is well for our own food security and as of July 1 we will have transitional stocks of grains and oils at the level of 5 million tonnes from the marketing year of last year – the average for the pre-war years.
It should be noted that the Ministry of Economy published the Inflation Report in the spring of this year and predicted that inflationary factors will increase under war conditions.
Source: Focus
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