World Food Prices End Year-Long Slide to Stoke Inflation Risk

(Bloomberg) — Global food prices rose for the first time in a year, just as the rampant run-up in grocery costs begins to cool in some countries.

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A United Nations index of food-commodity prices gained 0.6% in April, with pricier sugar offsetting losses for grains and dairy products. The sweetener has rallied as bad weather and lower fertilizer use hurts crops and limits field work in parts of Asia and South America. A looming El Nino also threatens to further tighten supply.

The UN’s gauge is down about 20% from a record set a year ago, when Russia’s invasion of Ukraine disrupted grain exports. But last month’s rebound could again stoke concerns over food inflation, which recently slowed in places from Kenya to Germany and Australia. Grocery prices still remain historically high in many regions, straining consumer budgets and worsening a hunger crisis.

Growing conditions for Northern Hemisphere crops and talks over extending a crucial Black Sea crop corridor will be key to where prices head. The grain deal was first agreed in July and has boosted flows of wheat, corn and sunflower oil from war-torn Ukraine, but Russia has threatened to withdraw this month if issues regarding its own grain and fertilizer shipments aren’t resolved.

Vegetable oil prices declined in April, the UN’s Food and Agriculture Organization said Friday. Meat costs increased as bird flu outbreaks curb poultry supplies and high production costs weigh on pork output.

The UN’s overall food index slumped in the past year partly due to ample harvests. But consumers have seen supermarket prices climb due to higher energy, labor, transport and processing costs.

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(Adds chart and context on meat prices in the fifth paragraph.)

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