NEW DELHI: Global food prices increased by 2.3 per cent in March from the previous month, the highest level since May 2013, as some crops were affected due to unfavourable weather conditions, according to the United Nations food agency FAO.
The Food and Agriculture Organisation (FAO) price index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar.
The index, based on prices of a basket of globally traded food commodities, averaged 212.8 points in March, up by 2.3 per cent from February, and the highest level since May 2013.
“Last month’s increase was largely driven by unfavourable weather conditions affecting some crops and geopolitical tensions in the Black Sea region,” FAO said.
Except for dairy products, which fell for the first time in four months, all the other commodity prices registered gains, with sugar and cereals increasing the most, it said.
The cereal price index averaged at 205.8 points in March, up by 5.2 per cent from February, marking the second month of significant increases.
“Last month’s strength stemmed from a surge in wheat and maize prices reflecting a strong pace in grain imports, growing concerns over the effect of continued dryness in the south-central United States on winter wheat crops, and unfavourable weather in parts of Brazil, the FAO said.
Geopolitical tensions in the Black Sea region, in particular uncertainties with regard to grain shipments from Ukraine, also provided a boost, it added.
However, global rice prices were generally stable.
The vegetable oil price index averaged 204.8 points in March, up by 4.5 per cent from February 2014 and the highest level in 18 months.
The rise in the vegetable oil prices mainly reflected a surge in palm oil, on continued concerns over the impact of protracted dry weather in Southeast Asia.
Tight inventories in Malaysia and the prospect of rising domestic consumption in Indonesia, the top palm oil producer and exporter, contributed to the strengthening in palm oil prices, as did reports about a possible El Niño weather event later this year.
International prices for soya, sunflower and rape seed oil also firmed up.
Dairy prices, however, fell by 2.5 per cent in March from the previous month. “Demand for all dairy products has been affected by reduced purchases by China and uncertainty over trade with the Russian Federation,” FAO said.
Additionally, an extended season in New Zealand and a good start to the dairy-year in the northern-hemisphere have meant that supplies for export have increased.
The dairy commodity subject to the sharpest price drop was whole milk powder, reflecting reduced buying interest from China, in particular, it added.
Global sugar prices averaged 253.9 points in March, up by 7.9 per cent from February 2014 as prices kept strengthening amid concerns of declining export availabilities from Brazil and Thailand, due to drought and reduced sugarcane output, respectively.
The likelihood of sugar crops being adversely affected by El Niño later this year also contributed to the price surge, it added.