Despite improved global market conditions, high food price inflation persists

Since peaking in April 2022, global agricultural food commodity prices have declined by almost 25% as of October 2023, according to the UN Food and Agriculture Organization’s (FAO) food price index (Figure 1). Contributing to the decrease were strong harvests in large food producing countries, steep declines in shipping costs, and more affordable energy and fertilizer prices (Figure 2). This broad-based easing of food price pressures occurred across markets for cereals, vegetable oils, meat, and dairy products (Figure 3). Sugar and rice were notable exceptions, as their world market prices have risen by double digits in recent months due to production disruptions caused in part by the El Niño phenomenon, as well as new trade restrictions and producer country stockpiling amid concerns over potential shortages.