Local food prices increasing despite global downturn

Staff Reporter :
Although international food commodity prices declined for the last twelve consecutive months, food prices in local market have no reflection of this global price downturn.
According to Food and Agriculture Organization’s (FAO) price index published in this April, food commodities now down by 20.5 percent from a record high recorded one year ago following war, costly energy, and La Niña. On the other hand, Inflation in Bangladesh climbed to 9.33 per cent in March with Food inflation raised 96 basis points to 9.09 per cent.
The report from FAO indicated that in global market cereal, vegetable oil and dairy product’s price decreased in a considerable rate and the price of sugar and meat had increased in March this year.
Considering most globally traded food commodities, FAO estimated global food price declined by 2.1 percent in March from the previous month. The FAO Cereal Price Index declined 5. 6% from February, with international Wheat prices falling by 7.1 percent and maize price by 4.6 percent.
The FAO vegetable oil Price Index averaged 3 percent lower than the previous month and in March2023, 47.7 percent declined year-on-year. Dairy products prices were also reduced by 0 .80 percent from February and stood at 10.7 percent its level in the corresponding month a year ago.
Sugar and meat prices were slightly increased by 0.8 and 1.5 percent respectively in March this year, as per data.
However, Bangladesh experienced galloping rate of inflation over the past eight months which seems sticker than the other countries.
In March inflation rate rose to 9.33 percent which was up by 55 basis points from 8.78 percent in February this year. Overall inflation was recorded in January was 8.57 percent. In December last year the inflation rate was reported 8.71 percent.
Likewise, the food inflation was recorded in February was 8.13 percent which was 7.76 percent in January this year.
Regarding these prices mismatch, experts said that, the macro economic instability especially the LC opening crisis due to forex crunch creating the mismatch between the global and local food commodity prices.
The role of competitive market structure, promoting equal opportunities, and market monitoring are also significant in reducing the price mismatch, as the business insiders said.
Maximo Torero, FAO chief economist said regarding the local and global food commodity price dissimilarity that, the price gap between global and local level posing additional challenges to food security.
“This is particularly so in net food importing developing countries, with the situation aggravated by the depreciation of their currencies against the US dollar or the euro and mounting debt burden”, FAO chief economist added.