Global Food Price Index Hits Record High for Two Consecutive Months... "Domestic Inflation Pressure Rises"

[Asia Economy Sejong=Reporter Kim Hyewon] Last month, global food prices reached an all-time high. The record was broken for the second consecutive month.

According to the Ministry of Agriculture, Food and Rural Affairs on the 9th, the United Nations Food and Agriculture Organization (FAO) Food Price Index (FFPI) recorded 159.3 points, up 12.6% compared to the previous month.

This is the highest level since the index was introduced in 1996. The record set last month was broken again within a month.

The sharp rise in prices of grains and oils, directly impacted by the Ukraine crisis, drove the overall index upward.

The grain price index recorded 170.1 points, up 17.1% from the previous month (145.3 points). Wheat prices rose due to export disruptions caused by the conflict between major exporters Russia and Ukraine, as well as concerns over crop conditions in the United States. Corn prices increased due to rising energy prices and concerns over reduced exports from Ukraine, a major exporter. Rice prices showed little change.

The oils price index rose 23.2% from the previous month to 248.6. The meat price index increased by 4.8%, while dairy and sugar prices rose by 2.6% and 6.7%, respectively.

The Ministry of Agriculture, Food and Rural Affairs lowered the interest rates on funds for purchasing feed and food raw materials from 2.5?3.0% to 2.0?2.5% to ease the burden on domestic industries caused by rising international grain prices. Additionally, the quota for tariff-free imports of substitute feed grains such as hulless barley and wheat bran was increased.

An official from the Ministry said, "There is a high possibility that domestic price burdens will increase due to the rising trend in international grain prices," adding, "We will closely communicate with the industry and monitor market conditions." They also stated, "We plan to expand domestic production and stockpiling of wheat and soybeans, and consider mid- to long-term policy measures for food security, including support for private companies to secure overseas grain supply chains."

FAO projected that global grain production for 2021?2022 will increase by 0.8% year-on-year to 2.79801 billion tons. Global grain consumption is expected to rise by 1% to 2.789 billion tons, and global grain ending stocks are forecasted to increase by 2.4% to 850.01 million tons.