By Chrysostomos Tsoufis

When early last week Eurostat announced a drop in food inflation of almost 2 points, there were quite a few who began to believe that the worst was now behind us. Even Christine Lagarde – although she avoided saying it openly – expressed the wish that since the prices of raw materials have fallen, this should be passed on to consumers.

Phew! The announcement of an increase in the UN’s food and agriculture index after a full year of decline erased any smiles of optimism.

The Index rose to 127.2 points in April, from 126.5 in March, fueling new scenarios of already skyrocketing price increases that are terrifying consumers around the world.

The main culprit of this increase is sugar. Its index rose 22.4 points in a month to 149.4, a rise of more than 17.5% and is now at its highest level since 2011. The rise was fueled by fears of sufficiency for the period to the end of the year as India and China have revised down their production estimates, while production in Thailand and the EU is also below initial expectations.

The….Brazil also has a hand both with the strengthening of the real against the dollar which pushes up the international prices and with the very strong rains which delay the harvest.

The rise of the meat index by one and a half units to 114.5 also had a reinforcing effect. Prices have increased in pork because there is an imbalance in supply and demand. Demand has increased as Asian markets need larger quantities but supply with health and high cost issues cannot keep up.

About the same picture as in poultry. Asians want more but the bird flu that has re-emerged in many countries worldwide has hit production. Beef prices also rise after US slaughter numbers fall. Only the prices of lamb goats remained almost at the same level.

Even in cereals whose index declined there are 2 sources of concern. The Black Sea deal that allows Ukraine to export grain expires on May 19, and ongoing talks on its third extension can’t be said to be going well as the Russians say they are unhappy with the terms on the table. .

The second factor of concern is the rice. According to Fitch, this year’s harvest will be the smallest in 20 years due to the ongoing Russian-Ukrainian war and bad weather conditions in China and Pakistan.

At the same time, in the last 2 years the demand has increased dramatically as millions of consumers on the planet are looking for cheaper alternatives to the very expensive wheat. Result of all this? The price of rice is at a decade high.

On the plus side, the decline for 10 consecutive months of the index of dairy products -a category of products that also bothers Greek consumers- which in April was about 25 points lower than the high of last June.