This is published in the latest edition of Barometer; the Food Price Index that tracks monthly changes in the international prices of five food commodities: cereals, vegetable oils, dairy products, meat, and sugar. The index averaged 140.9 points in July, or 8.6 points down from June.
Food prices dropped significantly
in July, marking the fourth consecutive monthly decline since hitting record
highs earlier in the year in the wake of the war in Ukraine, the Food and
Agricultural Organization (FAO) has reported.
This is published in the latest edition of Barometer; the Food Price Index that tracks monthly changes in the
international prices of five food commodities: cereals, vegetable oils, dairy
products, meat, and sugar. The index averaged 140.9 points
in July, or 8.6 points down from June.
The decline was led by double-digit
percentage drops in the cost of vegetable oils but also cereals, with the
recent UN-brokered deal on Ukrainian grain exports a contributing factor. “The decline in food commodity
prices from very high levels is welcome, especially when seen from a food
access viewpoint,” said Maximo Torero, FAO Chief Economist.
“However, many uncertainties
remain, including high fertilizer prices that can impact future production
prospects and farmers’ livelihoods, a bleak global economic outlook, and
currency movements, all of which pose serious strains for global food
In July, FAO’s Vegetable Price
Index decreased by 19.2 per cent compared to June, marking a 10-month low.
International quotations for all oil types fell, the agency said, with palm oil
prices declining due to prospects of ample export availability out of
Indonesia, for example.
Additionally, sunflower oil
prices also dropped markedly amid subdued global import demand, despite
continued logistical uncertainties in the Black Sea region. Vegetable oil
values were also pushed down by lower crude oil prices.
The Cereal Price Index also
reflected an 11.5 per cent decline last month, though the remaining 16.6 per cent
above July 2021. Prices of all cereals
in the index declined, led by wheat.
World wheat prices dropped by as
much as 14.5 per cent, FAO said, partly in reaction to the Russia-Ukraine deal
on grain exports from key Black Sea ports, and also because of seasonal
availability from ongoing harvests in the northern hemisphere.
July also saw an 11.2 per cent
decline in coarse grain prices. Maize
was down 10.7 per cent, again due in part to the Black Sea Grain Initiative and
increased seasonal availabilities in Argentina and Brazil. Additionally,
international rice prices also declined for the first time this year.
The Sugar Price Index fell by
nearly four per cent, amid concerns over demand prospects due to expectations
of a further global economic slowdown, a weakening in Brazil’s currency, the
real, and lower ethanol prices resulting in greater sugar production there than
The downward trend was also
influenced by indications of greater exports and favourable production
prospects in India. Meanwhile, the hot and dry weather in European Union
countries also sparked concerns over sugar beet yields and prevented sharper
FAO further reported that the
Dairy Price Index decreased 2.5 per cent “amid lacklustre trading activity”,
yet still averaged 25.4 per cent above last July. While the prices of milk powders
and butter declined, cheese prices remained stable, boosted by demand in
European tourism destinations.
Meat prices also continued the
downward trend, dropping by half a per cent from June due to weakening import
demands. However, poultry prices reached an all-time high, boosted by firm
import demand and tight supplies due to Avian influenza outbreaks in the
The FAO Meat Price Index was also
down in July, by 0.5 per cent from June, due to weakening import demand for
bovine, ovine and pig meats. By contrast, international poultry meat prices
reached an all-time high, underpinned by firm global import demand and tight
supplies due to Avian influenza outbreaks in the northern hemisphere.