SIERRA LEONE, Freetown – Based on the FAO food price index reports, the average food price increased significantly, reaching a historical level with an index of 159.7 in March 2022, from 133.7 in December 2021. However, it receded in April (158.3) and May (157.4) 2022. Vegetable oils and cereals recorded high increases mainly on account of the war in Ukraine and supply restrictions in some palm oil-producing countries.
Crude Oil Prices
The Ukraine war has intensified the pre-existing surge in crude oil prices in Q1-2022. Crude oil was recording significant price gains before the Russia-Ukraine crisis, but prices increased more sharply at the onset of the war in February 2022. Both Brent and WTI crude prices surged by 11.77 per cent and 22.12 per cent selling at US$88.94/bbl and US$94.45/bbl in Q1-2022. Crude oil is projected to average US$99.10/bbl in 2022, the highest price since 2008. Though prices are expected to recede somewhat in 2023, they could remain above pre-war levels especially if geopolitical tensions escalate.
Petroleum Products (Retail Prices)
Reflecting the surge in crude oil prices, the retail global prices for both petrol and diesel increased by 10.63 per cent and 17.13 per cent to US$3.68/gallon and US$4.29/gallon in Q1-2022, respectively. Retail prices are expected to strengthen in 2022 on average before receding slightly in 2023 but may remain above pre-existing levels in the medium term.
Iron Ore Price
Iron ore prices made some gains in Q1-2022, mainly on account of Russia’s importance in the commodity market coupled with higher extraction and transportation cost due to rising fuel prices. Though the projected average price of US$140.00/DMT in 2022 is significantly lower than in 2021, it remains above pre-pandemic levels. However, prices are tipped to drop in 2023 contingent on weakening demand in China and inventory build-ups in Australia and Brazil.
Cocoa and Coffee Prices
In Q1-2022, Cocoa and Robusta coffee prices remain relatively stable, amid rising global economic uncertainties. Cocoa was selling at an average price of US$2.49/kg in Q1-2022, compared with US$2.45/kg in Q4-2021. Similarly, Robusta coffee was selling at US$2.38/kg in Q1-2022, compared with US$2.41/kg. However, Arabica coffee price rose further averaging US$5.95/kg in Q1-2022, from US$5.64/kg in Q4-2021. The increase in Arabica coffee price reflects tight supply conditions as output from Brazil (the world’s largest producer) declined. Prices are projected to revolve around current levels in the near-to-medium term. ZIJ/19/9/2022