Global food prices see steepest decline since October 2008
Global food prices dipped for the fourth consecutive month in July as prices of vegetable oil and cereals made a significant drop, the UN’s Food and Agricultural Organisation said on Friday.
The FAO’s monthly food price index which tracks global commodities, averaged 140.9 points in July, down 8.6 percent from June, the steepest monthly fall since October 2008.
Despite the monthly decline, the July index was still 13.1percent higher than a year earlier, pushed up in part by concerns over the impact of the Russian invasion of Ukraine.
The Cereal Price Index also reflected an 11.5 percent decline last month, though remaining 16.6 percent above July 2021. Prices of all cereals in the index declined, led by wheat.
Global wheat prices dropped by as much as 14.5 percent, according to FAO, noting that the drop is partly in reaction to the Russia –Ukraine deal on grain exports from key black sea ports and seasonal availability from ongoing harvest in the northern hemisphere.
“The decline in food commodity prices from very high levels is welcome, especially when seen from a food access viewpoint,” said Maximo Torero, chief economist at FAO
“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 security,” Torero added.
The July monthly index also saw an 11.2 percent decline in coarse grain prices. Maize was down 10.7 percent, again due in part to the black sea grain initiative and increased seasonal availability in Argentina and Brazil. Additionally, international rice prices also declined for the first time this year.
Similarly, the sugar price index fell by nearly four percent, 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 previously expected.
Meat prices also continued the downward trend, dropping by half a percent 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 northern hemisphere.
