A strategic expert at the Food and Agriculture Organization of the United Nations “FAO” analyzes for “Economy Sky News Arabia” what stands behind this increase, which he described as “slight”, and the relationship of the increase in the price of sugar in particular to the production of biofuels, which is expected in the coming weeks.
According to what was published by the “FAO” on its website, that its food price index averaged 127.2 points in April 2023, an increase of 0.8 points, or 0.6 percent from its level in March.
The food price index stood at 31.2 points, or 19.7 percent below its level in the same period last year.
The FAO Food Price Index is used to measure the monthly change in international prices for a basket of basic food commodities. It consists of the average price indices of 5 groups of basic commodities, weighted by each group’s share of exports during the period 2014-2016.
slight increase
Nader Noureddine, a professor of water and land at Cairo University and a strategic expert at FAO, comments on the aforementioned numbers by saying:
- The rise in food prices is “slight”, exceeding 0.6 percent, only for the general food index; i.e. household expenditures on total food items.
- Despite the rise, it is still lower than the same month of April last year by 19.6 percent.
- Food prices rose in general due to the increase in sugar prices to expand its use in the production of biofuels, in addition to the decline in production in India and Thailand this year, then a slight increase in the prices of meat and dairy products.
- Prices are expected to rise again due to Russia’s recent announcement that it will not renew the grain export agreement across the Black Sea; Because it believes that the agreement was in favor of Ukraine only, while it did not benefit in light of the fact that the countries that signed sanctions against it did not allow it to export fertilizers, or for Russian banks to receive remittances from its grain sales, and therefore it sells on credit and does not receive the price of what it sells.
Moscow threatens that if its conditions are not met, it will not renew the grain export agreement, which is due to expire on May 18.
Prices of sugar, meat and poultry
According to the FAO index, sugar prices increased by 149.4 points in April, an increase of 22.4 points, or 17.6 percent from what they were in March. This is the fourth consecutive monthly increase, and the highest level recorded since October 2011.
The significant increase in prices came mainly as a result of increasing concerns about the decline in the quantities available globally in the season 2022/2023 due to the decrease in production in India, China, Thailand and the European Union.
Also, the slow process of harvesting the sugar cane crop in Brazil as a result of the rains reinforces the price increase.
For meat, the FAO index averaged 114.5 points in April, up 1.5 points, or 1.3 percent, from March and 7.4 points, or 6.1 percent, below its level in the same period last year.
As for poultry meat prices, they rose again after 9 months of continuous decline, in parallel with the high demand for imports from Asia, and the continued restrictions imposed on supply as a result of the outbreak of bird flu in several regions.
As for beef prices, the increase came after a decrease in the number of cows destined for slaughter, especially in the United States, while lamb meat prices remained largely stable due to the high quantities available for export from Australia and other neighboring countries almost identical to the rise in imports from Asia and Middle Eastern countries.
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