According to the UN FAO, the drop in March compared to February was about 2%, and when compared with March 2022, then about 20%. Now the index is 126.9.
The main reason for such a significant decline in the index is the fall in prices for grain, vegetable oils and dairy products.
Why is grain cheaper?
According to it, the fall compared to the last month was 5.6%, for wheat and even more — 7.1%. The main reason why grain is getting cheaper is the high level of supply on the world market.
In particular, Australia shows good harvest results, in the EU conditions for spring sowing are improving, which gives positive forecasts.
At the same time, Russia is increasing exports to get rid of the surpluses of last year’s record harvest.
In parallel, within the framework of the grain deal, the export of grain from Ukraine continues.
For similar reasons, other grains are becoming cheaper: for example, the index for corn fell by 4.6%, for rice by 3.2% compared to February.
Why are oil prices going down?
Vegetable oils in March fell in price by 3% compared with February, but if compared with last March, then by 47.7%, that is, almost twice.
The reason for such a decline in quotations is that world oil reserves are also at a high level, while demand is not growing.
At the same time, although prices have halved compared to last year, they still remain quite high, experts say.
At the same time, they are growing in the domestic markets of countries, including due to the depreciation of their currencies. All this can be a problem for those countries that are net importers of vegetable oil, the UN noted.
What is the reason for the drop in the milk index?
Compared to February, the index fell by 0.8%, which is not much. However, butter, on the contrary, even grew, while cheese fell more significantly, this is associated with a slowdown in demand from Asian countries.
And besides, with the fact that the availability of this product among exporters has increased.
The sugar index showed significant growth, it immediately added 1.5%, which is the highest value since 2016.
Why is meat more expensive?
The meat index shows not a fall, but an increase of 0.5%. In the US, they expect supply cuts in the future, this leads to the fact that demand is growing.
However, the meat market is also not all homogeneous. For example, poultry meat has become cheaper for the ninth month in a row, this is due to the fact that global demand as a whole shows a decrease, in connection with which exporters of such products have to reduce their prices.
