Despite boasting about its agriculture, Turkey ranks fifth in food inflation

The United Nations Food and Agriculture Organization (FAO) announced that global food prices fell for the 12th consecutive month in March, due to abundant supply, low import demand, and the extension of the Black Sea Grain Corridor Initiative. According to the statement from the FAO, the FAO Food Price Index, which tracks monthly changes in international prices of food products, fell by 2.1% in March compared to the previous month, to 126.9 points. Thus, the index extended its consecutive decline to 12 months and fell to its lowest level since July 2021.

The FAO statement noted that the index had fallen by approximately 20.5% from its record level in March of last year, following the start of the Russia-Ukraine war. The index reached a record high of 159.7 points in March 2022, along with the war.

DECLINE IN GRAIN AND VEGETABLE OIL PRICES

The FAO has pointed out that the decline in the index reflects the decrease in grain, vegetable oil, and dairy prices, which offset the increases in sugar and meat prices.

The Vegetable Oil Price Index decreased by 3% on a monthly basis due to the high supply and sluggish global import demand, which pulled down the prices of soybean, rapeseed, and sunflower oil. The index fell to about 47.7% below its level a year ago.

The Grain Price Index showed a decline of 5.6% on a monthly basis and 31.6% on an annual basis.

THE PRICE OF WHEAT FELL BY SEVEN PERCENT

International wheat prices fell by 7.1% in March due to the extension of the Black Sea Grain Corridor Initiative and strong competition among exporters, which led to an increase in global supply. Rice and corn prices also fell by 3.2% and 4.6%, respectively.

The Sugar Price Index increased by 1.5% on a monthly basis to reach 127 points, its highest level since October 2016, due to concerns over declining production expectations in India, Thailand, and China.

During the same period, the FAO Dairy Price Index decreased by 0.8%, while the Meat Price Index showed an increase of 0.8%.

PRODUCTION EXPECTATIONS

FAO also published the Grain Supply and Demand Summary Report, which includes evaluations on global production, consumption, trade, and stock trends.

According to the report, FAO raised its estimate for global grain production in 2022/2023 from 2.773.8 billion tons to 2.777 billion tons. This represents only a 1.2% decrease compared to the previous year.

FAO lowered its estimate for global rice production by 1.6% from the 2021-2022 level to 516 million tons due to low official estimates for Indonesia's production.

The report forecasts that global grain use will decrease by 0.7% from the 2021-2022 level to 2.779 billion tons in 2022-2023.

TURKEY RANKS AMONG THE TOP FIVE COUNTRIES IN FOOD INFLATION

While food prices are declining in global markets, they continue to rise rapidly in Turkey. According to the World Bank's February report on "Food Security," Lebanon has the highest food inflation, while Turkey ranks fifth in the world. Official data from the Turkish Statistical Institute (TUIK) also shows that annual food inflation in Turkey was 69 percent.

Thus, Turkey ranked fifth after Lebanon, Zimbabwe, Argentina, and Iran. The top 10 countries were completed by Egypt, Rwanda, Ghana, Suriname, and Sri Lanka.

The Central Bank also emphasized food prices in its inflation report for March. The report stated that food prices have risen "at a rate above its historical trend" in this period, led mainly by red meat and processed meat products.