International food prices fall, but food access in vulnerable countries remains a concern

At a press briefing today from New York, journalists heard from Máximo Torero, FAO Chief Economist, who spoke on the Food Price Index update for September and its implications for world food commodity markets ahead.

The FAO Food Price Index, the gauge for world food commodity prices, saw its sixth monthly decline in a row after an all-time high reached in March 2022, with sharp drops in the prices of vegetable oils offsetting higher cereal prices. 

The FAO Food Price Index tracks monthly changes in world prices of five major food commodity groups – cereals, vegetable oils, meat, dairy products and sugar. It averaged 136.3 points in September, down 1.1 percent from August. With this new decline in September, the Food Price Index is down 14.6 percent from its peak in March. However, it remains 5.5 percent above its value a year ago. 

Connecting virtually at a press briefing in the United Nations in New York organized by the Office of the Spokesperson of the Secretary-General, the FAO Chief Economist, Máximo Torero, briefed on these latest trends and price fluctuations.

Torero warned that, while lower world prices generally reflect better availability at the global level, this has not led to better food access for low-income countries. This is due to several factors, including the high costs of processing and transportation, logistics and the depreciation of currencies against the US dollar, he explained. Read more here.

Looking into 2023, concerns of food accessibility remain

Notwithstanding some declines, world prices of energy and gas remain high, reducing fertilizer affordability and increasing production costs, adding a serious challenge to production in 2022/23. 

This may cause farmers to plant less or to plant and obtain lower yields due to the unaffordability of this key agricultural input. The recent decreases in world prices, therefore, do not automatically mean market stability, Torero said. 

“We are still subject to uncertainties and volatility, which relate to developments in the energy and fertilizer markets, to weather conditions, and to policy reactions especially by exporting countries,” he said. 

Adding that what we have had this year is a food access crisis and not a food availability crisis, despite the war in Ukraine, Torero said: “In terms of food access, we still have a problem because the poorest countries are still not able to afford key commodities”.

A positive response, the Chief Economist remarked, is that the International Monetary Fund’s Board has recently approved a food shock window response instrument, which builds on FAO’s proposal for a Food Import Financing Facility to support the most vulnerable countries facing rising food import bills. 

This initiative stands to complement the Black Sea Grain Initiative, through which food availability has improved, but not necessarily food access at the levels expected, Torero outlined.

Related links

• Did you miss the press briefing? Watch the recording.
• Read more about the FAO Food Prince Index here and follow latest related updates from the Agricultural Market Information Systems (AMIS).