World food prices lower

According to Absa’s Agri Trends published on 10 April 2015, world food prices are lower. The FAO food price index, which measures monthly price changes of a selected number of food items, declined to an average of 173,8 points in March 2015. The decrease can be ascribed to strong declines in sugar prices as crop prospects improved in major sugar-producing countries. Soft decreases were also recorded by vegetable oils, cereals and meat. The index has been following a downward trend since April 2014.

Domestic food prices, however, are not expected to follow the same trend. Drought conditions have resulted in major yield losses in maize and oilseed crops, which is reflected by the current high Safex prices for the commodities. The high grain prices are likely to have a spillover effect on the livestock, dairy and poultry industries by way of high feed prices and subsequent high food prices. Financial partnership between farmers and their financiers needs to be revaluated continually to ensure national food security. To view the full report, click HERE.