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Gulf Insider
03-05-2025
- Business
- Gulf Insider
Global Food Prices Climb Toward Arab Spring-Era Highs Amid Trade War Turmoil
Global food prices surged to a two-year high in April, driven by U.S. tariff policy uncertainty that has injected turmoil across markets. The latest spike brings prices dangerously close to levels that helped fuel the Arab Spring uprisings across the Middle East and North Africa between 2010 and 2012. The Food and Agriculture Organization of the United Nations (FAO) reported on Friday that its Food Price Index—which tracks monthly changes in international prices of globally traded food commodities—averaged 128.3 points in April, up 1% from March and 7.6% from the same month last year. The Food Price Index (FFPI) subcomponents, including cereals, meat, and dairy, mainly were up, while vegetable oils and sugar were down. Here's a breakdown of how FFPI's subcomponents performed in April: Cereals: Up 1.2% from March; wheat rose on tighter Russian exports, rice up on demand for fragrant varieties, maize higher due to low U.S. stocks. Meat: Up 3.2%; pig meat led gains, bovine prices firmed in Australia and Brazil on strong demand and limited supply. Dairy: Up 2.4%; butter hit an all-time high due to declining inventories in Europe, dairy index now 22.9% higher year-over-year. Vegetable Oils: Down 2.3%; palm oil fell with rising Southeast Asian output, soy and rapeseed oil up on strong demand, sunflower oil steady. Sugar: Down 3.5%; decline driven by fears of weakened demand from beverage and food sectors amid uncertain global economic outlook. At 128.3, the FAO said FFPI moved to a two-year high on 'currency fluctuations influencing price movements in world markets, while tariff policy adjustments raised market uncertainty.' Those prices are nearing 2010-12 Arab Spring levels… Bloomberg quoted Monika Tothova, an economist at the FAO, as saying that short-term demand for some ag products has been visible amid the tariff war between President Trump and China. The lingering question is whether the FFPI will continue rising amid tariff uncertainty—or if potential signaling around new trade talks between the U.S. and China suggests this price surge may be temporary. Still concerning is the level at which prices linger and how higher food prices can trigger social destabilization in weak countries.
See - Sada Elbalad
11-03-2025
- Business
- See - Sada Elbalad
FAO Food Price Index Rose in February 2025
Basant Ahmed The FAO Food Price Index (FFPI) averaged 127.1 points in February 2025, up 2.0 points (1.6 percent) from its revised January level. While the meat price index remained stable, all other price indices rose, with the most significant increases recorded for sugar, dairy, and vegetable oils. The overall index was 9.7 points (8.2 percent) higher than its corresponding level one year ago; however, it remained 33.1 points (20.7 percent) below the peak reached in March 2022. The FAO Cereal Price Index averaged 112.6 points in February, rising by 0.8 points (0.7 percent) from January but remaining 1.2 points (1.1 percent) below its February 2024 level. Wheat export prices increased month-on-month, driven by tighter domestic supplies in the Russian Federation, which constrained export volumes and shifted demand to other suppliers, adding upward pressure on global prices. Additional support for the price increases came from concerns over unfavorable crop conditions in parts of Europe, the Russian Federation, and the United States of America. World maize prices continued their upward trend in February, primarily due to tightening seasonal supplies in Brazil, worsening crop conditions in Argentina, and strong export demand for the United States' maize. Among other coarse grains, world prices of barley and sorghum also increased. By contrast, the FAO All Rice Price Index declined by 6.8 percent in February, as ample exportable supplies and weak import demand exerted downward pressure on prices. The FAO Vegetable Oil Price Index averaged 156.0 points in February, up 3.0 points (2.0 percent) from the previous month and as much as 35.1 points (29.1 percent) above its level a year earlier. The increase in the index was driven by higher quotations across palm, rapeseed, soy, and sunflower oils. After a brief decline in January, international palm oil prices rebounded moderately and maintained their premiums over competing oils. The increase was largely underpinned by seasonally lower outputs in Southeast Asian producing countries and expectations of increased demand from the biodiesel industry in Indonesia. Meanwhile, global soyoil prices increased due to firm global demand, particularly from the food sector. In the case of sunflower and rapeseed oils, prices were mainly supported by concerns over likely tightening supplies in the coming months. The FAO Meat Price Index averaged 118.0 points in February, down marginally by 0.1 points (0.1 percent) from January but remaining at 5.4 points (4.8 percent) above its level a year ago. International poultry meat prices declined, driven by abundant global supplies primarily due to high export availabilities from Brazil despite continuing avian influenza outbreaks in other major producing countries. Similarly, pig meat prices softened, pressured by lower quotations in the European Union. While prices showed signs of stabilization, they remained below early January levels (before the outbreak of foot and mouth disease) due to a surplus caused by trade restrictions on German pig meat. By contrast, ovine meat prices rose, underpinned by strong global demand. New Zealand's export volumes declined due to lower production, but higher slaughter rates in Australia raised supply, limiting the price increases. Meanwhile, bovine meat quotations strengthened, driven by rising Australian prices amid robust global demand, particularly from the United States of America. However, the increase was partially offset by lower Brazilian bovine meat prices due to ample cattle supplies. The FAO Dairy Price Index stood at 148.7 points in February, rising by 5.7 points (4.0 percent) from January and standing at 28.0 points (23.2 percent) higher than
