Food prices broke records in 2022 due to the war in Ukraine

Against the background of the war in Ukraine, which made it difficult for wheat, corn and sunflower tradethe prices of staple foods broke records in 2022, the United Nations Food and Agriculture Organization (FAO) said on Friday.

The invasion of Ukraine by Russia, fifth and first world wheat exporters, respectively, with 30% of the world supply, plunged food markets into an era of uncertainty since February.

A few days after the start of the Russian offensive, on February 24, the world food prices reached their “highest levels ever recorded” in March.

In 2022, the food price indexwhich follows the variation in the international values ​​of a basket of basic products, was established at 143.7 points on average, “that is, 14.3% more than the average value of 2021,” the international organization said on Friday. .

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The previous record dated back to 2011, when there was a food crisis and riots over the famine in africareaching an index of 131.9 points.

The invasion of Europe’s wheat barn has highlighted fragilities and dependencies, especially of poor countries, prompting fears of a new global food crisis.

The worst-case scenario, with “famine hurricanes” as feared by the UN, was averted thanks to the resumption of Ukrainian exports this summer, but the prices will remain high in 2023, always in the midst of strong volatility.

“World prices for wheat and corn reached record levels” in 2022, the FAO stressed this Friday.

In the European market, wheat rose as high as 438 euros ($463) per tonne on May 16, after starting the year at 270 euros ($285). With always abnormal volatility, it stood at around 315 euros (333 dollars) at the end of December, which represents an increase of almost 17% in one year.

Since Ukraine is also an important sunflower oil producerthe median value of the FAO Vegetable Oil Price Index also broke a record throughout the year.

Meat and dairy prices, meanwhile, reached “the highest annual levels since 1990,” according to the UN agency.

Russia as referee

Food prices fell again in April and have declined steadily for the past nine months. The fao index December 2022, with an average of 132.4 points, fell by 1.9% in one month and even fell below its level of a year ago.

The tension was further reduced in July after the signing of an agreement to resume the Ukrainian wheat exports to the Black Sea. A “corridor” hard negotiated under the auspices of the UN, which allowed 15 million tons of grains and oilseeds to be removed from the silos.

“It is good that food prices are calming down after two very volatile years,” said Máximo Torero, FAO’s chief economist, adding that it is essential to “stay vigilant and focus on mitigating global food insecurity.”

Torero warned that world food prices “remain high, with many staples close to record levels, rising rice prices, and many risks associated with future supplies.”

World wheat stocks are the highest among exporters, according to the firm Agritel, but 35% are in Russia, which has harvested more than 100 million tons of wheat and thus confirms its arbitrator position.

In December 2022, the vegetable oil price index declined by 6.7% from November, falling to its lowest level since February 2021.

That of cereals decreased by 1.9% compared to the month of November, due to a greater availability of wheat after the harvests in the southern hemisphere and due to a drop in world corn prices.

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