International food commodity prices dropped for the 12th consecutive month in March driven by lower prices for cereals and vegetable oils, the United Nations’ (UN) Food and Agricultural Organization (FAO) reported.

The FAO Food Price Index – the benchmark index of global food commodity prices – averaged 126.9 points in March, down 2.1% compared to the previous month and 20.5% below its peak level last March.

A combination of ample supplies, subdued import demand and the extension of the Black Sea Grain Initiative on 18 March to facilitate agri food exports from Ukraine’s deep seaports contributed to the drop, according to the 7 April report.

The FAO Vegetable Oil Price Index averaged 3% lower compared to the previous month and 47.7% below the level at the same time last year. This was due to ample world supplies and subdued global import demand pushing down soyabean, rapeseed and sunflower oil prices, which more than offset higher palm oil prices. Palm oil prices had risen due to lower output levels in Southeast Asia following floodings and temporary export restrictions imposed by Indonesia, the report said.

“While prices dropped at the global level, they are still very high and continue to increase in domestic markets, posing additional challenges to food security. This is particularly so in net food importing developing countries, with the situation aggravated by the depreciation of their currencies against the US dollar or the Euro and mounting debt burden,” FAO chief economist Máximo Torero said.

The FAO Dairy Price Index dropped 0.8% in March, with butter prices increasing due to solid import demand, while cheese quotations dipped due to slower purchases by most leading importers in Asia and increased availability from leading exporters, the report said.

By contrast, the FAO Sugar Price Index and the FAO Meat Price Index increased by 1.5% and 0.5% respectively compared to the previous month.

The FAO Index tracks international prices of a basket of commonly-traded commodities.

The FAO’s vegetable oil price index illustrates the changes in international prices of the 10 most important vegetable oils in world trade, weighted according to their export shares.