COVID-19 crashes FAO’s global food price index

The Coronavirus (COVID-19) outbreak has crashed the Food and Agriculture Organisation (FAO) 2019 global food price index, a report has revealed.

This was disclosed yesterday in Maiduguri, Borno State in last year’s FAO forecasts for world trade.

“This is coming as higher maize outputs in West African countries, including Nigeria and Ukraine in Eastern Europe, affected cereal supply and demand,” the report stated, adding that estimates for 2019 world production is expected to hit 2.719 trillion tons.

The report also disclosed that FAO forecasts world trade in cereals would rise by 2.3 per cent to 420 million tons in 2019/20, explaining that this was the second-highest level on record, with wheat shipments accounting for over 50 per cent of expected increase.

On how world food prices crashed, the report said, “Interestingly, world food prices declined in February for the first time in four months due to sharp fall in the export prices of vegetable oils,” adding that global food price crash, was partly driven by fears that coronavirus outbreak would slow global demands.

The FAO Food Price Index, which tracks monthly changes in international prices of commonly traded food commodities, averaged 180.5 points in February.

It said prices fell a percentage point from the previous month, but still 8.1 per cent higher than a year earlier.

On COVID-19’s food price crash, the report forecast said, “The FAO Vegetable Oil Index declined 10.3 per cent from January 2019.

“The international palm oil price is falling by even more on account of higher-than-expected output in Malaysia. This is a temporary drop in India’s import demand and concerns over the spread of COVID-19.

“The FAO Cereal Price Index declined 0.9 per cent in February. Wheat prices were lower, reflecting well-supplied markets, while maize prices retreated, as demand from the livestock feed sector dipped amid expectations of a weakening global economy.”

The report added that by contrast, international rice prices rose, buoyed by strong demand from Far Eastern and East African buyers. The FAO Meat Price Index was also down by 2.0 per cent from January, influenced by reduced imports from China impacted by cargo handling delays in ports.