Global food commodity costs ease for 11th straight month
Global food costs edged down again, extending their retreat to the lowest in 17 months, although consumers continue to feel the pinch at grocery stores.
A United Nations' index of food-commodity costs eased 0.6% in February, down for an 11th month in the longest run of losses in data going back three decades. Last month's fall was driven by cooking oils and dairy, and the overall gauge is down 19% from a record set a year ago when Russia's invasion of Ukraine disrupted grain exports.
A year into the war, wheat prices are under pressure from ample harvests in producers like Russia and Australia, while vegetable oils and meat costs have also slid. Still, it takes time for that to filter through to stores, where prices are also kept high because of energy, labor and transport costs.
Keep updated, follow The Business Standard's Google news channel
For example, higher food prices recently helped push up French consumer prices by a euro-era record, and UK grocery inflation surged to a fresh peak. It's a problem squeezing households around the world — and shoppers may still face more price hikes.
"There is still a lot of cost inflation to be recovered," said John Bason, finance director at Associated British Foods Plc. Tough commercial negotiations are "a fact of life between suppliers and supermarkets. We all recognize that this is a tough time for everyone," he said.
World Bank data published this week showed high food-price inflation in almost all low- and middle-income countries. About 87% of high-income countries are experiencing elevated price increases too.
The UN's index, which tracks five major exported food groups, is at the lowest since September 2021. Sugar prices rose last month, while meat and grains were little changed, its Food and Agriculture Organization said Friday.
There are however signs that food inflation in some parts of the world may be easing. Paraguay reported the lowest inflation since December 2021 thanks to a moderation in food and fuel prices.
US fast-food chain Wendy's Co. expects commodity inflation in the mid-single digits this year and beef to be slightly deflationary in its current fiscal year, Chief Financial Officer Gunther Plosch said this week. Kraft Heinz Co. said that it doesn't plan more price increases across North America, Europe, Latin America and most of Asia.
