War is driving up food prices

War is driving up the price of food commodities such as wheat, maize, and vegetable oils, said the Food and Agriculture Organization of the United Nations (FAO). World food commodity prices made a significant leap in March as the war in the Black Sea region spread shocks through the markets for staple grains and vegetable oils.
The FAO Food Price Index averaged 159.3 points in March, up 12.6% from February. The agency noted that this is the highest jump since the index’s inception in 1990. The latest index level was also 3.6% higher than in March last year.
The agency’s Cereal Price Index was 17.1% higher last month than prices in February, driven by significant rises in wheat and all coarse grain prices. The price increase was primarily because of the war in Ukraine. Combined, the Russian Federation and Ukraine accounted for around 30% and 20% of global wheat and maize exports, respectively, over the past three years. World wheat prices soared by 19.7% during the month, exacerbated by concerns over crop conditions in the US. Meanwhile, FAO said that maize prices posted a 19.1% month-on-month increase, hitting a record high along with barley and sorghum.
Meanwhile, the FAO Vegetable Oil Price Index rose 23.2%, driven by higher quotations for sunflower seed oil. Ukraine is the world's leading exporter. Palm, soy, and rapeseed oil prices also rose because of the higher sunflower seed oil prices. The FAO Sugar Price Index rose 6.7% from February, reversing recent declines to reach a level more than 20% higher than in March 2021.
The FAO Meat Price Index increased by 4.8% in March to reach an all-time high, led by surging pork meat prices related to a shortfall of slaughter pigs in Western Europe. After avian flu outbreaks, international poultry prices also met with reduced supplies from leading exporting countries.
Lastly, the prices of dairy products also rose. The FAO Dairy Price Index registered 2.6%. It was 23.6% higher than in March 2021, as quotations for butter and milk powders rose steeply amid import demand for immediate and long-term deliveries, especially from Asian markets.

(Image from Unsplash)