UN Reports Global Food Price Decline in 2023, Except for Two Key Staples

food prices

The United Nations Food and Agriculture Organization (FAO) reported a decline in global food prices from the record highs of 2022, with the exception of two key staples.

In 2023, global prices for food commodities such as grain and vegetable oil decreased by 13.7% compared to the 2022 average. Factors contributing to the record highs in 2022 included Russia’s war in Ukraine, drought, and other elements exacerbating global hunger. The FAO Food Price Index, monitoring monthly changes in international prices of commonly traded food commodities, revealed a 10% drop last month compared to December 2022.

Despite the challenging year for global food security, marked by climate-related issues, conflicts like the war in Ukraine, trade bans impacting food inflation, and weakened currencies, food commodity prices experienced a decline in 2023. However, the relief from lower prices did not necessarily translate to improved conditions for shopkeepers, street vendors, and families facing financial constraints.

An estimated 333 million people experienced acute levels of food insecurity in 2023, as reported by the World Food Program, underscoring the persistent challenges despite the drop in food prices.

Rice and sugar posed particular challenges in 2023 due to climate effects in Asian growing regions, leading to increased prices, especially in African nations. The FAO’s grain index, except for rice, was 15.4% below the 2022 average, indicating well-supplied global markets, even with Russia’s withdrawal from a wartime grain deal. Wheat buyers found alternative supplies, including from Russia, at prices lower than those before the war.

The FAO’s rice index increased by 21% in 2023, driven by India’s export restrictions and concerns about El Niño’s impact on rice production. Similarly, the sugar index reached its highest level since 2011, rising by 26.7% from 2022 due to concerns about low supplies caused by dry weather in India and Thailand.

Meat, dairy, and vegetable oil prices, on the other hand, decreased from 2022 levels. Vegetable oil, a significant export from the Black Sea region that experienced spikes after Russia invaded Ukraine, reached a three-year low as global supplies improved, according to the FAO.

Featured Image: Megapixl © Terovesalainen

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About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.