LOC22:33
19:33 GMT
ROME, April 2 (KUNA) -- Food and Agriculture Organization (FAO) said Thursday world food prices declined sharply in March, driven mostly by demand-side contractions linked to the effects of COVID-19 pandemic and the drop in global oil prices.
Prices declined mostly due to expectations of economic slowdown as governments roll out restrictions designed to respond to the health crisis, FAO said in a monthly bulletin.
FAO said its Food Price Index, which tracks monthly changes in international prices of commonly traded food commodities, averaged 172.2 points during the month, down 4.3 percent from February.
"The price drops are largely driven by demand factors, not supply, and the demand factors are influenced by ever-more deteriorating economic prospects," said FAO Senior Economist Abdolreza Abbassian.
FAO Sugar Price Index posted the biggest drop, down 19.1 percent from the previous month.
Causes include lower demand from out-of-home consumption linked to the confinement measures imposed by many countries, and lower demand from ethanol producers due to the steep fall in crude oil prices.
The FAO Vegetable Oil Price Index declined 12.0 percent in one month, mainly stemming from falling palm oil prices linked to the plunge in crude mineral oil prices and rising uncertainties over the pandemic's impact on vegetable oil markets worldwide. Soy and rapeseed oil prices followed the trend.
The FAO Dairy Price Index fell by three percent, driven by declining quotations and global import demand for skim and whole milk powders, due largely to disruptions in the dairy supply chains because of the containment measures aimed at controlling the spread of COVID-19. (end)
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