VSis a record that the inhabitants of the planet would have done without. The Food and Agriculture Organization of the United Nations (FAO) again issued an alert on Friday 8 April. “World food prices are at their highest”, she launched. The previous record, set in February, has already been shattered. A month later, the FAO index, which tracks the monthly change in international prices of a basket of basic necessities, jumped 12.6%.
The invasion of Ukraine by Russian troops on February 24 fueled speculation on agricultural prices, already under pressure with the crisis due to Covid-19. Investors have weighed the weight of the two countries on the markets and the dependence of their customers. Unsurprisingly, therefore, the price of wheat soared. But also corn. Knowing that Russia and Ukraine together represent almost a quarter of the world grain trade.
However, the maritime flows to sell their stocks are disrupted, and concerns weigh on the level of the wheat harvest already in the ground and corn still to be sown in the conflict zones, where the arms are likely to be lacking. In other producing countries, the question of the cost of fertilizers, linked to the rise in the price of gas, could penalize the 2023 harvest. In this context, the FAO cereal price index recorded a 17% increase in one month. .
Abundant rice
Even hotter, edible oil prices jumped 23%. Ukraine accounts for half of the world trade in sunflower oil. The ratio reaches 80% with Russia. The risk of supply shortages for this fat caused its price to explode, dragging rapeseed, soybean and palm oils in its wake.
By domino effect, the price of meat increases when the animals crunch golden grains on edge. The international organization believes that it breaks historic records. Especially since health crises are reducing herds, in pigs, affected by African swine fever, as in poultry, decimated by an unprecedented avian flu epidemic.
In this dark picture, the FAO places some lighter touches. First, by highlighting the stability of the abundant rice. Then, even if it has revised its cereal harvest forecasts downwards, it expects world wheat production of 784 million tonnes in 2022, up 1.1%. His postulate: 20% of the area of winter crops planted in Ukraine will not be harvested.
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