Global food prices fall in March as coronavirus and oil slump

World food prices fell sharply in March, impacted by the drop in demand linked to the coronavirus pandemic and the decline in global oil prices, the United Nations food agency said on Thursday (2). The Food And Agriculture Organization (FAO) food price index, which measures monthly variations in a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 172.2 points last month, down 4.3% from February. "Price falls are largely driven by demand factors, not supply, and demand factors are influenced by increasingly deteriorating economic prospects," said FAO senior economist Abdolreza Abbassian. FAO also slightly raised its forecast for cereal production, forecasting a total harvest of about 2.721 billion tons in 2019, higher than the previous forecast of 2.719 billion and 2.4% above the 2018 harvest. FAO's sugar price index recorded the largest drop, 19.1% compared to the previous month. The drop was triggered by a reduction in quarantine-associated consumption in many countries to combat the spread of the virus and lower demand faced by ethanol producers due to the recent collapse in oil prices, the Rome-based agency said. World food prices fell sharply in March, impacted by the drop in demand linked to the coronavirus pandemic and the decline in global oil prices, the United Nations food agency said on Thursday (2). The Food And Agriculture Organization (FAO) food price index, which measures monthly variations in a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 172.2 points last month, down 4.3% from February. "Price falls are largely driven by demand factors, not supply, and demand factors are influenced by increasingly deteriorating economic prospects," said FAO senior economist Abdolreza Abbassian. FAO also slightly raised its forecast for cereal production, forecasting a total harvest of about 2.721 billion tons in 2019, higher than the previous forecast of 2.719 billion and 2.4% above the 2018 harvest. FAO's sugar price index recorded the largest drop, 19.1% compared to the previous month. The drop was triggered by a reduction in quarantine-associated consumption in many countries to combat the spread of the virus and lower demand faced by ethanol producers due to the recent collapse in oil prices, the Rome-based agency said.