Global food prices surged to a record high in March according to the FAO Food Price Index. The index consisting of the average of five commodity group price indices weighted by the average export shares of each of the groups jumped to 159.3 points in March, indicating a nearly 60 percent increase in food prices compared to the 2014-2016 base period.
The war in Ukraine is clearly the biggest driver behind the latest surge. After all, the region is often referred to as the world's breadbasket due to its major role in global grain supplies. As a consequence, the FAO Cereal Price Index jumped 24.9 points to 170.1 in March, largely driven by export disruptions related to the conflict. "The expected loss of exports from the Black Sea region exacerbated the already tight global availability of wheat," the FAO finds, adding that maize and barley prices also climbed to record levels in March.
The Vegetable Oil Price Index climbed even higher than the Cereal Index to 248.6 points, as Russia and Ukraine account for more than 60 percent of global sunflower oil exports, with expected supply disruptions also driving up the prices of substitutes such as palm, soy and rapeseed oils.