FAO: wholesale food prices are not transferred

The Food and Agriculture Organization of the United Nations (FAO) revealed that the relative fall in international prices of primary foods has not been able to translate, in its entirety, into a decrease in prices at the retail level of domestic markets , suggesting that cost of living pressures could persist into 2023.

In his recent report on Food OutlookFAO maintains, for example, that world maize prices fell 10.2% between April and September 2022, but only moved by 4.8% on average when compared to the effective local currency of developing countries (importers net).

The main risk is that the increase in world prices, driven by the increase in the prices of fruit, vegetables, sugar and dairy products, discourage demand, especially in economically vulnerable countries.

In this way, FAO forecasts that the world cost of food will rise to US$1.98 trillion in 2023, 1.5% more than in the previous year, when it already increased by 11% after having already increased by 18% in 2021.

In view of this, the international organization points out that the global agri-food production systems continue to be under siege from disturbances derived from meteorological phenomena, geopolitical tensions, policy changes and developments in other commodity markets.

These factors could change the balance between supply and demand, and have an impact on prices and global food security. Thus, FAO highlights the importance of well-adapted interventions to combat inflation, which also play a role of social calm in the face of a possible malaise that postpones global recovery.

World cereal production on the rise

It is expected that world production of coarse grains increases by 3% until reaching 1,513 million tons.

Wheat production in 2023 will fall 3% from its 2022 record high due to forecast declines in Australia and Russia.

Global fish production is expected to rise due to an expected increase in the aquaculture industry as capture fisheries decline.