Global food prices remain near record levels

War in Ukraine strongly impacts global export chains, especially for grains and vegetable oils, and countries take measures to protect their markets

Global food prices remain close to level recordpressured by the impact of the invasion of Ukraine by Russia in world trade.

The war drastically reduced the Ukraine exports, one of the largest exporters of grain and vegetable oil. The blockade of major Black Sea ports has exacerbated supply chain turmoil and driven up prices. The United Nations warns that food shortages could drive millions of people to migrate.

A UN indicator of global food costs dropped slightly by 0.6% in May from the previous month. the prices of vegetable oil fell 3.5%, in part due to the removal of Indonesia’s palm oil export ban, the Food and Agriculture Organization of the United Nations said.

Farmers face record energy and input costs, and the UN said the lack of fertilizers could deepen the food crisis in 2023. Food prices were already high due to logistical problems and a recovery in demand after the pandemic.

Food inflation hits the hardest poor countrieswhere groceries make up a large part of consumer budgets.

The UN food price index surged 13% in March, its fastest pace on record, immediately after Russia’s attack, before falling slightly in April as demand for vegetable oil fell and corn prices weakened. .

Vegetable oil and grain prices were pressured by protectionist measures as countries have sought to protect their own markets. Malaysia has banned chicken exports, while India has decided to reduce shipments of wheat and sugar.

Source: Bloomberg