Global food prices skyrocketed following the Russian invasion of Ukraine last February, but they have returned to earth, said the FAO Food Price Index, based on monthly changes in a basket of food commodities. The index stood at 135.7 at the end of November, only 0.1 point above its pre-invasion level despite reaching a record high in March.
World wheat prices fell 2.8 percent during November due to factors that included Russia’s decision to allow exports of Ukrainian grain to continue via the Black Sea. Corn prices fell 1.7 percent from October. Russia and Ukraine usually account for 30 percent of wheat and 20 percent of corn on the international market. Ukraine also is the top exporter of sunflower oil.
Dairy and meat prices also fell during the month, while vegetable oils and sugar prices moved upward. It was the first increase for sugar in seven months.
In a companion report, the FAO said world grain production in 2022 would be the smallest in three years. “The reduction largely reflects low maize production prospects in Ukraine, where the impact of the war has made post-harvesting operations prohibitively expensive, compelling many farmers to leave planted areas unharvested,” said the Cereal Supply and Demand Brief. The world wheat harvest would be the largest ever.
“Looking ahead, planting of the 2023 winter wheat crop is underway amid concerns over the affordability of key agricultural inputs and adverse weather conditions in the United States of America and the Russian Federation, although elevated crop prices could help to maintain an above-average area globally.”