Global food prices have reached record levels

According to the FAO statement, the FAO Food Price Index, which tracks monthly changes in international prices of food products, increased by 3.9 percent in February compared to January and reached an average of 140.7 points. The rate of increase was 24.1 percent compared to February of last year. The index reached an all-time high with the said value. It is noteworthy that global food prices increased due to dairy products and vegetable oils. Grain Price Index increased by 2 percent month on month and 14,8 percent year on year due to rising wheat and corn prices. The concern that the war between Ukraine and Russia, the two largest wheat exporters in the Black Sea region, would limit wheat and corn exports was effective in this increase. The Vegetable Oil Price Index increased by 8.5 percent month on month due to the driving force of palm, soybean and sunflower prices. Ukraine and Russia account for about 80 percent of global sunflower oil exports. The Sugar Price Index fell 1.9 percent from the previous month on positive production prospects in major exporters India and Thailand. The FAO Dairy Price Index rose 6.4 percent, supported by scarce global supply, while the meat price index rose 1.1 percent. As economies recover from the crisis caused by the Covid-19 outbreak, high food prices push inflation rates upwards, while FAO warns that high food costs also put poor populations at risk in import-dependent countries. FAO Senior Economist Upali Galketi Aratchilage, whose evaluations are included in the report, stated that concerns about "crop conditions and exportability" partially caused the increase in global food prices. "The bigger driver of food inflation comes from outside food production, particularly in the energy, fertilizer, and feed sectors," Aratchilage said. Aratchilage emphasized that all these factors push food producers to narrow their profit margins, which also forces these producers to give up on investing in and expanding production. FAO also published the Grain Supply and Demand Summary Report, which includes assessments and forecasts of global production, consumption, trade, and stock trends. In the report, it was noted that global wheat production is expected to increase to 790 million tons in 2021 from 775.4 million tons in 2021 due to the high yields in the USA and Asia. In the report, which is estimated to increase by 1.5 percent above the 2020–2021 level in 2021–2021, it is predicted that it will reach 2 billion 802 million tons. In the FAO report, it was also stated that the estimates were made without taking into account the possible impact of the war between Russia and Ukraine.