In March, world food prices rebounded from a three-year low, driven by increases in vegetable oils, meat, and dairy products, according to the latest report from the Food and Agriculture Organization (FAO). The FAO's index, which tracks globally traded food commodities, averaged 118.3 points, up from the previous month's revised 117.0 points.

The increase in vegetable oil prices led the gains, with all major oils registering increases. Dairy prices also continued their upward trend, driven by higher prices for cheese and butter. Meanwhile, the meat index saw a modest increase, reflecting higher prices for poultry, pig, and beef.

However, these gains were offset by declines in cereals and sugar prices. Wheat prices declined due to strong export competition and canceled purchases by China, while maize prices saw a slight increase partly due to logistical difficulties in Ukraine.

Sugar prices fell mainly due to upward revisions in expected production in India and improved harvest pace in Thailand.

Looking ahead, the FAO slightly adjusted its forecast for world cereal production in 2023/24, nudging it up to 2.841 billion metric tons. However, for wheat, the forecast was trimmed slightly due to adverse weather conditions in the European Union and the UK.

Overall, while there are fluctuations in food prices, the FAO expects world cereal production to remain robust, with maize production anticipated to stay above the average of the past five years.