According to the latest data released by the United Nations Food and Agriculture Organization, the world food commodity price soared to an all-time high in March. Among them, the international prices of wheat, corn and vegetable oil increased significantly. Why did global food prices hit a new high? Will the Chinese market be affected?
At present, global food prices are rising. According to the data of FAO tracking the monthly changes of international prices of food commodities, the FAO food price index averaged 159.3 points in March. After climbing to the highest level since its establishment in 1990 in February, it rose again by 12.6% month on month. The index level in March was 33.6% higher than that in the same period last year.
Global food prices hit a new high in March, mainly affected by the continuous fermentation of the conflict between Russia and Ukraine. FAO analysis pointed out that since late February, the development of the situation in Russia and Ukraine has seriously impacted the international staple food and vegetable oil market, leading to the global food price jumping to a new historical high in March. Wheat and all coarse grain commodity prices rose sharply, and the FAO grain price index rose 17.1% month on month in March.
The rise in global food prices caused by the conflict between Russia and Ukraine is related to the important position of the two countries in the global food supply system.
According to FAO statistics, Russia is the world’s largest wheat exporter, and Ukraine ranks fifth. The two countries together account for 19% of global barley supply, 14% of wheat supply and 4% of corn supply, accounting for more than one-third of global grain exports. In the past three years, Russia and Ukraine together accounted for about 30% and 20% of global wheat and corn exports, respectively. At the same time, the two countries are also major suppliers of rapeseed, accounting for 52% of the world sunflower oil export market.
In an interview with China News Agency, Li Guoxiang, a researcher at the Institute of rural development of the Chinese Academy of Social Sciences, said that in recent years, affected by covid-19 pandemic, natural disasters and other factors, the supply and demand situation of major global food prices has tightened. At this time, the outbreak of the conflict between Russia and Ukraine has further exacerbated the tension between global supply and demand and boosted the continuous rise of global food prices.
Affected by the rise in global food prices, recently, Shenzhen Agricultural Products Group Co.Ltd(000061) prices in China’s many farmers’ markets also fluctuated and rose. As global food prices hit a new high in March and the conflict between Russia and Ukraine continues to ferment, whether China will be affected has also attracted market attention.
According to the market operation monitoring system of the Ministry of Commerce of China, from March 28 to April 3, the national food Shenzhen Agricultural Products Group Co.Ltd(000061) market price increased by 1.9% over the previous week. In the same period, the data monitored by the Ministry of agriculture and rural areas showed that the Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price index and the wholesale price index of vegetable basket products also increased compared with the previous week, and both were more than 10 percentage points higher than the same period last year.
In Li Guoxiang’s view, the recent rise in China’s Shenzhen Agricultural Products Group Co.Ltd(000061) price is mainly affected by the current international situation, but it will not have a significant impact on the Chinese market in the short term. At present, the fluctuation of food prices in China is still under control.
According to FAO data, the impact of the Russian Ukrainian conflict on international food prices is mainly reflected in the significant rise in the international prices of wheat, corn and vegetable oil.
World wheat prices soared 19.7% month on month; Meanwhile, the price of corn increased by 19.1% month on month, hitting a record high together with the prices of barley and sorghum. The vegetable oil price index increased by 23.2% month on month (MOM), due to the rising quotation of sunflower oil, and Ukraine is the world’s leading exporter of sunflower oil. In contrast, the FAO rice price index remained almost unchanged from February, still 10% lower than the same period last year.
Li Guoxiang said that from the perspective of wheat market conditions, China’s wheat prices are basically controllable through national regulation; In terms of vegetable oil layer, Chinese residents mainly consume rapeseed oil and peanut oil. At present, the increase of them in China is small, and the market price is relatively stable. In terms of import, the proportion of sunflower oil in China’s main imported oils is also relatively small, so it will not have a great impact on China.
Turning to the impact of corn market price, he said that Ukraine is one of the major countries importing corn from China. If its corn export volume decreases, it may have some impact on China. However, recently, China is also planning to expand corn planting, and farmers have high planting enthusiasm. It is expected to make up for the loss caused by the reduction of imports from Ukraine.
Looking forward to the trend of global food prices in the later stage, Li Guoxiang frankly said that there is still great uncertainty. In view of the status of Russia and Ukraine in the field of agricultural production, the global Shenzhen Agricultural Products Group Co.Ltd(000061) price is expected to be affected by this.
In his view, the sanctions imposed by European and American countries on Russia may further affect global food prices. Because in terms of production scale, Russia’s Shenzhen Agricultural Products Group Co.Ltd(000061) production is larger than that of Ukraine, and the escalation of sanctions against Russia will significantly increase Shenzhen Agricultural Products Group Co.Ltd(000061) freight costs, which will have an spillover effect on prices and push up global food prices.
In view of the global food price situation, Li Guoxiang said that at present, Chinese officials are vigorously stepping up production, and the overall food supply is sufficient. Recently, many departments and regions in China have successively introduced measures to deploy and strengthen important Shenzhen Agricultural Products Group Co.Ltd(000061) supply, so as to further meet and protect the consumption demand of residents.
