UN says that due to Coronavirus fallout, World Food prices and Oil fell sharply in March
A drop was felt in the demand for food and oil due to the Covid-19 outbreak as a result of which the World Food prices and oil prices plunged down sharply. This was said by the United Nations food agency on Thursday.
The Food and Agricultural Organization (FAO) price index averaged 172.2 points in the last month which is a 4.3% decrease than in February. This index measures the monthly changes for a basket of oilseeds, cereals, meat, dairy products and sugar.
The FAO senior economist, Abdolreza Abbassian said that, this decrease is due to the changes in the demand factors and not the supply factors. He also added that the demand factors are highly influenced by ever-more declining economic prospects.
The FAO’s price index for sugar witnessed the highest downfall i.e. 19% from the last month. This drop is due to the diminishing consumption of people because of the virus lockdowns which was done in many countries world-wide.
Also, the price index of vegetable oil plummeted by 12% which pushed down the palm oil prices which can be linked to a drop in the price of crude mineral oil and also the increasing uncertainty over the effect of the virus outbreak.
There was a drop of 3% in the diary price index which was highly influenced by the diminishing quotations and reducing global import demand for whole and slim milk powders. Also, the meat index dropped by 0.6%.
FAO has also said a statement that this condition alongside with ample inventories will help in shielding the food markets from the turmoil created by the coronavirus outbreak.