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March reached the highest level of global price increases in just over three decades, especially in vegetable oils and cereals “largely” as an effect of the war in Ukraine, indicated the entity of the United Nations Organization in the matter. . The index climbed 12.6% more than in February. What dangers does the rise represent?
This Friday, April 8, the Food and Agriculture Organization of the United Nations (FAO according to its acronym in English), which combs the most commercialized basic products worldwide, reported that food prices reached an unprecedented level since 1990, where the increase in vegetable oils and cereals stands out.
The entity indicated that “to a large extent” this increase in prices is a consequence of the war unleashed between Russia and Ukraine and that it directly affects products derived from grain.
However, the FAO explained that the increase also includes meat and dairy products, the latter in a “remarkable” way. Graphed in numbers, the month of March 2022 yielded 12.6% more than February, a jump that made it reach 159.3 points, a maximum peak since the entity’s creation in 1990.
The grain situation is the one most tied to the Russian-Ukrainian conflict, given that both parties are major exporters of wheat, barley and corn, while they account for 52% of sunflower oil. In this category, the increase was 17.1% from one month to another.
According to the explanation of the FAO, the “sudden” escalation of the world costs of some cereals are linked to the concerns that were generated by the exports of Ukraine and Russia.
They even had to lower the projection of world wheat production, which was at 790 million last month, to 784 million due to the concrete chance that 20% of the Ukrainian winter cultivation area will not be harvested.
The drop in exports from the Black Sea deepened the “low availability of wheat”, fueled by a “worrying” situation regarding crops in the United States.
Cereal projections for the 2021/22 period were down 14.6 million tonnes from the February outlook and 2% below 2020/21. However, the outlook for 2022/23 was widened, due to the expectation that the interruption of exports will cause greater reserves for Ukraine and Russia.
In the vegetable oil section, there was also a new record after climbing 23.2% in products made from sunflower, palm, soybean and rapeseed. The first, compromised by the decrease in supplies in the Black Sea; while soybeans rose due to “concern about a decrease in export availability in South America”.
The Russian invasion also had an impact on the price of meat, another element with historical increases, reaching 4.8% in March. The same path for poultry meat, which increased because Ukraine was unable to export and, on the other hand, due to cases of avian flu in other leading exporting countries.
Expensive products beyond the war
Not all of the global increases were tied to the Russian invasion on Ukrainian soil. There were other products inherent to the conflict that also climbed record steps, as reported by the FAO.
Pork had the sharpest monthly increase since 1995 due to the tight supply of slaughter pigs in Western Europe. While rice barely changed in March, being up to 10% cheaper than last year. Meanwhile, sugar entered the meager category of “good behavior prices”.
With EFE, AP and Reuters
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