The recent attacks of Yemen-based Houthi rebels on ships in the Red Sea have paralyzed shipping through the Suez Canal, forcing exporters in the Black Sea region and elsewhere to consider alternative—and more costly—shipping routes. In early January, A.P. Moller-Maersk A/S, the world's second-largest container ship company, announced it would suspend shipments through the Red Sea. Trade volumes in the Suez Canal are down an estimated 40% since the attacks began.
Report launch: The key role of trade in strengthening food security in Latin America and the Caribbean
Recent events such as the war in Ukraine and the El Niño weather cycle have demonstrated how shocks triggering changes in production and distribution of food in one country or region can reverberate around the world, eroding food security for millions if not billions. Efficient, agile, and diverse trade networks can help countries and suppliers to cope with these shocks and strengthen food security. These networks are especially relevant for Latin America and the Caribbean (LAC).
As with other commodity markets such as rice, the global sugar market has seen large increases in prices due to El Niño-related production shortfalls in major exporting countries in South and Southeast Asia. At the same time, other factors are also constricting supplies. Port bottlenecks have tied up exports in Brazil, the world's largest sugar exporter, despite a large increase in production over last year's levels. Domestic biofuel policies in key exporting countries are diverting sugar production to biofuel production and thus limiting exports.
Food prices continued to decline, albeit more slowly, in October, according to the latest FAO Food Price Index. The Index was down 0.5 percent from September and 10.9 percent from October 2022.
The FAO Food Price Index remained virtually unchanged month-to-month in September and almost 24 percent lower than the peak reached in March 2022.