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Insight of the Day: Global Food Commodity Prices Return to 2021 Levels

In 2023, global food commodity prices have returned to 2021 levels after reaching unprecedented highs in 2022 due to the war in Ukraine and lingering effects of the COVID-19 pandemic.

Key points:

  • Food price peak: The FAO Food Price Index reached a peak in March 2022 due to the war in Ukraine disrupting grain and oil exports.

  • Return to 2021 levels: In April 2024, the index stood at 119.1 points, indicating a 19% increase compared to the 2014-2016 base period but significantly lower than the 2022 peak.

  • Pandemic impact: Food prices had already been rising in 2021 due to supply chain disruptions and harvest setbacks caused by the pandemic.

  • Ukraine's role: The war in Ukraine had a significant impact on cereal and oil prices, as the region is a major global supplier of these commodities.

  • Recovery: The resumption of Ukrainian food exports through the Black Sea Grain Initiative and alternative routes has helped stabilize prices.

Overall, the decline in global food commodity prices is a positive development for food security, but challenges remain due to inflation and other factors affecting food prices at the consumer level.

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