The Food and Agriculture Organization’s price index, which tracks the most globally traded food commodities, averaged 129.8 points last month against 130.6 for January, the agency said on Friday. It was the lowest reading since September 2021.

The monthly update said the decline in the index reflected lower prices for vegetable oils and dairy products, which more than offset a steep rise in sugar prices.

The FAO cereal price index fell by a marginal 0.1 percent month-on-month in February, with a marginal rise in wheat prices more than offset by lower rice prices.

Vegetable oils fell by 3.2 percent and dairy by 2.7 percent, while sugar rose by 6.9 percent to a six-year high due largely to a downward revision to production in India.

Lower Wheat Production

In a separate report on cereals supply and demand, the FAO issued a first preliminary forecast for global wheat production in 2023, with a year-on-year decline to 784 million tons seen although the crop would still be the second highest on record.

“In Ukraine, severe financial constraints, infrastructure damage and obstructed access to fields in parts of the country have resulted in an estimated 40 percent year-on-year reduction in the 2023 winter wheat area, and a well below-average wheat output is anticipated in 2023,” the FAO said.

The decline was partially offset by an expected rise in US production to 51 million tons, with high prices leading to an increase in wheat sowings to the highest level since 2015.

The FAO raised its forecast for world cereal production in 2022 by 9 million tons to 2.77 billion tons, although that would still be 1.3 percent lower year-on-year.

The report said the bulk of the upward revision related to rice, with an improved outlook for production in India.