Global food prices are falling, but European supermarket prices are still high

According to FAO*, world food prices have been declining for the twelfth month in a row.

One of the factors contributing to this is the extension of the Black Sea Grain Initiative, according to the Food and Agriculture Organization of the United Nations (FAO). Thanks to it, there is a fall in world quotations for vegetable oils and grains.

In March 2023, the food price index stood at 126.9 points, down 2% from the previous month and 20.5% below the March 2022 peak.

The Cereal Price Index was down 5.6% from February, with global wheat prices falling 7.1%, driven by high production in Australia, improved planting conditions in the European Union, strong supplies from Russia and continued export from Ukraine.

World corn prices fell 4.6% on expectations of a record harvest in Brazil. Rice fell 3.2% on the back of harvests in major exporting countries, including India, Vietnam and Thailand.

The vegetable oil price index is 3.0% lower than the previous month and almost half (47.7%) below the level of March 2022, as abundant global stocks and rather subdued import demand led to lower prices for soybean, rapeseed and sunflower oil. Dairy products price index fell by 0.8% in March. The FAO report also notes that the price indices for sugar and meat rose by 1.5% and 0.5%, respectively.

The Black Sea Agreement has helped alleviate concerns about food shortages in Africa. This continent is heavily dependent on exports from Ukraine, one of the world’s major grain producers.

Unfortunately, the fall in the food price index has not yet had a noticeable impact on prices in European supermarkets, where core inflation, which includes food items, remains high.

*FAO – Food and Agriculture Organization of the United Nations – an organization whose main task is to fight hunger. FAO acts as a forum where developed and developing countries as equals discuss and agree on policy decisions in the field of food security.

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