20.7pc: Food Prices Jump To Hit Record High In Feb

Web Desk — According to the Food and Agriculture Organization (FAO), a Rome-based UN agency, food prices around the world hit a record high in February, thanks largely to a surge in vegetable oils and dairy products.

FAO’s food price index, which tracks global food prices, averaged 140.7 points last month, compared to a downwardly revised 135.4 in January. That figure was previously given as 135.7.

The FAO has warned that the higher costs are putting poorer populations at risk in countries dependent on imports as economies recover from the Coronavirus crisis.

Global food prices are not entirely explained by concerns over crop conditions and export availability, according to FAO economist Upali Galketi Aratchilage.

“A much bigger push for food price inflation comes from outside food production, particularly the energy, fertilizer, and feed sectors,” he said.

“All these factors tend to squeeze profit margins of food producers, discouraging them from investing and expanding production.”

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The February report was compiled mostly before the Russian invasion of Ukraine.

A prolonged conflict could have a major impact on grain exports as tensions in the Black Sea area have already been weighing on agricultural markets.

As a result of rising palm, soy, and sunflower oil prices, the FAO said its vegetable oils index rose 8.5 percent month-on-month in February. About 80 percent of sunflower oil is exported from Ukraine and Russia.

Despite uncertainty about global supply flows from Black Sea ports, cereal prices rose 3 percent on the month, with maize prices up 5.1 percent and wheat prices up 2.1 percent.

The UN agency cautioned, however, that its projections did not factor in the potential impact of the conflict between Russia and Ukraine.