Food Prices Rising, FAO Says

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Global food prices rose in February, with the FAO Food Price Index averaging 167.5 points, up 1.7 percent from January, in part driven up by sharp increases in dairy prices.

The Index, which is an indicator of the monthly changes in international prices of a basket of food commodities, is currently at its highest level since August 2018, but still nearly 2.3 percent below its value at the same month last year.

FAO Director-General José Graziano da Silva, has however, said that incorporating food and improved nutrition as important components of urban planning is key to achieving sustainable development, including Zero Hunger and healthy diets for all.

‘’We need to engage with cities because it is in cities where more and more people live, eat and work, and where we need to locally implement global commitments’’, Graziano da Silva said at the launch of FAO’s Framework for the Urban Food Agenda: A holistic approach to ensuring sustainable development.

The FAO big boss noted how urban areas are also the setting where the laws and regulations are produced. “That is where the regulation of food systems is set and that is why the United Nations agency is working with cities more and more,” he added.

At least 55 percent of the world’s population already lives in urban areas – a proportion expected to increase to at least 65 percent by 2050- and with nearly 80 percent of all food produced globally now consumed in urban areas. Urbanization is creating unprecedented challenges to ensuring that everyone has accessible, affordable food, while keeping a healthy diet, and preserving natural resources and biodiversity.

Referring to a recent high-level UN meeting with mayors and urban food policy representatives in New York, the FAO Director-General stressed that urban development can no longer be addressed separately from rural development. “The two processes must be mutually reinforcing,” he said. “Rather than considering urbanization and rural transformation as separate processes, we must take this opportunity to break the rural-urban divide.”

‘’We should resist the false dichotomy of the urban/rural divide,” said for his part, 2018 World Food Prize winner and Executive Director of the Global Alliance for Improved Nutrition (GAIN) Lawrence Haddad. “The urban food environment really shapes what consumers can buy and consume. The time really seems right now to make a big push to get better diets, better nutrition and better food systems, which in turn will also attract investment and employment opportunities’’, he stressed.

‘’It is very important to closely listen and identify the needs of citizens and transforming them in concrete projects. We also need to raise awareness of the importance of a new food and nutrition culture, one that also reduces inequalities, especially among children’’, said mayor of Tunis Souad Abderrahim.

Speaking in French, she said: ‘’You cannot just randomly become a “mayor” (maire). A “mayor” is first of all a ‘’mother’’ (mère), which means being close to our fellow citizens, support their concerns and solve their problems, just as any “mother” would do.”

‘’Thinking and policy-making about food systems are consistently recognized as central elements to build inclusive climate action, urban development, poverty reduction and circular economy. Dealing with food means dealing with all of these,” said Anna Scavuzzo, vice-mayor of Milan who is also in charge of the Milan Urban Food Policy Pact, aimed at promoting more sustainable urban food systems and tackling food waste.

Aimed at supporting decision makers at different levels, the Framework presents ideas on how cities around the world can implement actions to generate employment, strengthen local food value chains; and reduce and manage the worrisome levels of food waste found in many cities.

It also provides guidance on how FAO, with its partners, can assist governments to improve policy environments through coordinated laws, regulations, governance and institutional empowerment, and execute actions according to context-specific realities, such as shorter supply chains, inclusive public food procurement, innovative agro-food business, healthier food and green environments, and optimized supply chains and sustainable bio economy.

The Framework also aims at escalating good practices through the exchange of information on food systems governance.

FAO is supporting cities around the world to achieve better nutrition and healthier diets. In particular, it is supporting the establishment of the World Sustainable Food Centre of Valencia (Spain), aimed at promoting healthy and sustainable food systems among cities, to be launched on 1 April 2019 with Queen Letizia of Spain participating as FAO’s Special Ambassador for Nutrition.

In the mean time, the FAO Cereal Price Index averaged almost 169 points in February, up marginally from January mostly on firmer maize prices.

The FAO Vegetable Oil Price Index increased by 1.8 percent, to 133.5 points, marking its highest level since October 2018. The rise in February was mainly due to higher price quotations of palm, soy and sunflower oils.

The FAO Meat Price Index was up slightly, supported by higher prices of bovine and pig meat.

The FAO Dairy Price Index increased by 5.6 percent from January, driven by a strong import demand for Skim Milk Powder, Whole Milk Powder and cheese. An expected seasonal drop in butter production also contributed to pushing up butter prices.

The FAO Sugar Price Index rose by 1.2 percent from January, largely on concerns over production prospects in some of the main producing countries. 

In its new Cereal Supply and Demand Brief, also published today, FAO lowered the world’s 2018 cereal production estimate to 2 609 million tonnes, down 2.8 million tonnes from January. The latest revision rests almost entirely on a lower estimate for the United States’ maize output and reinforces an overall year-on-year decrease in global cereal production.

The FAO forecasts of global cereal utilization and stocks in 2018/19 have also been lowered this month. However, the ratio of global cereal carryovers to utilization (stock-to-use) in 2018/19, which is seen to fall from 30.5 percent in 2017/18 to 28.3 percent in 2018/19, would still represent a relatively comfortable level.

FAO’s forecast for world trade in cereals in 2018/19 has been lowered by 2 million tonnes since last month to just over 413 tonnes. Among the major cereals, the forecast for global wheat trade has been trimmed most, by around 800 000 tonnes, largely on weaker pace in purchases by several Asian and South American countries. 

While the bulk of the winter wheat crop in the northern hemisphere is still in dormancy phase, FAO’s first forecast of world wheat production in 2019 is pegged at 757 million tonnes. At this level, this year’s output would be 4.0 percent above the level attained in 2018 but still short of the record high registered in 2017.

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