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    Cheaper food remains expensive // ​​FAO records a six-month period of food price decline

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    World food prices, after jumping to historic highs in March, fell in September for the sixth month in a row – but remain above last year’s levels, the UN Food and Agriculture Organization (FAO) said yesterday. The local decline in the overall FAO index does not remove either the problem of the impact of the surge in prices on inflation in the world, or the issue of food shortages in many countries. High food prices will be supported by food shortages – according to experts, in the next decade, the pace of food consumption will grow faster than the pace of its production.

    points, and this is 1.1% lower than in August. In general, the decline in the index continues for the sixth month in a row, but at the same time it is still 5.5% higher than the level of September last year. Recall that in March, food prices set a record against the backdrop of events in Ukraine – then the FAO index rose by 33.6% yoy and by 12.6% against February. However, even before that, food prices were driven up by the pandemic and difficulties in the energy market. Since April, food prices have been gradually decreasing.

    The price index for them increased by 1.5% by August. This increase in the organization is explained by the growing uncertainty about the continuation of the Black Sea Grain Initiative after November and the possible consequences of the situation for Ukrainian exports. On these fears, world prices for wheat rose in September by 2.2%. To this factor, FAO adds climatic difficulties such as a lack of rainfall in Argentina and the United States, as well as an increased interest of European Union countries in buying wheat on world markets amid tensions with corn supplies. The price index for rice also rose by 2.2% in September, primarily Indian varieties of rice rose in price due to restrictions on exports.

    Prices for the other four categories of food fell slightly. Vegetable oil prices fell by 6.6% compared to August, to the lowest level since February 2021. The sugar price index lost 0.7%, dropping to a minimum since July 2021 (favorable crop prospects in Brazil).

    to the dollar. Finally, the meat price index fell by 0.5% (due to the prices of lamb and beef; scarce pork, on the contrary, is becoming more expensive). It should be noted that both “milk” and meat, despite the decline in indices, nevertheless cost significantly more than a year ago – in annual terms by 20.7% and 7.7%, respectively.

    Thus, FAO reported yesterday that 45 countries of the world, including 33 African countries, now need external assistance to provide food. However, judging by the data of experts, it will not be possible to solve the problem of food shortage by its redistribution – in the next decade, the rate of food consumption will grow faster than the rate of its production. In 2022-2031, as follows from the joint forecast of the OECD and FAO, global agricultural production will grow by 1.1% annually, with an increase in consumption by 1.4% (primarily due to population growth). Thus, according to experts, it will not be possible to eradicate hunger by 2030 (such a goal is set by the UN). To do this, the productivity growth of the global agro-industrial complex over the decade should be 28%, which is three times higher than in 2010-2020 (for more details, see Kommersant for July 2).

    In theory, increase growth rates in agriculture could invest in technology, infrastructure and training. But the current rise in prices for energy resources and fertilizers does not contribute to this in any way – on the contrary, by increasing the costs of farmers, it holds back the necessary increase in productivity in the industry.

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