Global Food Commodity Costs Continue Downtrend For 11th Consecutive Month

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The United Nations (UN) index of food commodities recorded eleven months of consistent decline in costs, seeing a 0.6 per cent ease in February. This marks the longest run of cost decrease in three decades.

According to Bloomberg reporter Agnieszka de Sousa, “Last month’s fall was driven by cooking oils and dairy. The overall gauge is down 19% from a record set a year ago when Russia’s invasion of Ukraine disrupted grain exports.”

De Sousa added that while vegetable oils and meats saw lower costs, grain costs are still under pressure in producers like Australia and Russia. She also added that despite the prices of food commodities declining, consumers are still feeling the pinch in grocery stores as energy, labour, and transport costs are soaring.

Philip Brasher, a reporter for Agri-Pulse, added that “ the index is now 18.7% below the peak reached in March 2022 on the heels of Russia’s invasion of Ukraine.” he noted that the dairy index dropped 2.7 per cent in February, with butter and skim milk powder significantly contributing for the decrease.

The vegetable oil index also dropped 3.2 per cent, its lowest level since 2021. According to Brasher, the global prices for palm, soy, sunflower seed, and rapeseed oils continued to contribute to the lower index. Despite consistent avian influenza, the meat index was down 0.1 per cent last month. This reflects the abundant supplies in the global market.

CNN journalist Danielle Wiener-Bronner’s article supported De Sousa’s statement on why grocery store prices are still high. Food producers are still facing the challenge of costly expenses. Nevertheless, many experts feel that food producers are using this reason to boost profits and attempt to correct the low prices in recent years.

Jean-Pierre Dubé, a marketing professor at the University of Chicago Booth School of Business, also mentioned that companies tend to take advantage of the change in costs, most especially when the change is heavily publicised.

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