Global food prices hit record levels amid Ukraine conflict

The United Nations Food and Agriculture Organization reported on Friday that its Food Price Index has hit its highest levels yet since its 1990 inception, with record highs in prices for cereals, vegetable oils and meats amid the ongoing Russia-Ukraine conflict.

The FAO Food Price Index, which measures the change in international food costs monthly for different commodities, rose 17.9 points between February and March, averaging 159.3 points for March.

The FAO Vegetable Oil Price Index rose close to 47 points between the months, averaging 248.6 points in March, a record high for the commodity. The organization’s index for cereal rose close to 25 points, averaging 170.1 points in March, another high, while its meat price index rose 5.5 points, averaging 120 points in March.

The FAO’s price indices for dairy and sugar also made noticeable upward trends. 

The FAO noted that the upward trend in their price indices for vegetable oil and cereal was tied to the conflict in Ukraine given that Ukraine is a key exporter of sunflower oil and wheat.

“This month’s increase reflected a surge in world prices of wheat and coarse grains, largely driven by conflict-related export disruptions from Ukraine and, to a lesser extent, the Russian Federation. The expected loss of exports from the Black Sea region exacerbated the already tight global availability of wheat,” the FAO said regarding their cereal index.

The FAO noted that its vegetable oil index rose given higher prices in palm, soy, sunflower and rapeseed oils.

“International sunflower seed oil quotations increased substantially in March, fuelled by reduced export supplies amid the ongoing conflict in the Black Sea region. In the meantime, palm, soy and rapeseed oil prices also rose markedly, buoyed by rising global import demand in the wake of sunflower oil supply disruptions,” the FAO said.

The invasion has sparked worries that food prices could increase if the Russian invasion continues on, disrupting already fragile supply chains.