FAO Food Price Index drops steeply in July

ROME, Aug 6, (KUNA): The FAO Food Price Index (FFPI), a measure of the monthly change in international prices of a basket of food commodities, registered a steep drop in July, averaging 140.9 points, down 13.3 points or 8.6 percent from June.

This is the fourth consecutive monthly decline. Nevertheless, FFPI remained 16.4 points (13.1 percent) above the level of the corresponding month last year, according to the latest monthly report released by the UN Food and Agriculture Organization (FAO) on Friday.

The July decline was the steepest monthly fall in the value of the index since October 2008, led by significant drops in vegetable oil and cereal indices, while those of sugar, dairy and meat also fell but to a lesser extent.

The FAO Cereal Price Index averaged 147.3 points in July following a fall of 19.1 points (11.5 percent) from June, but remained 21.0 points (16.6 percent) above its July 2021 value.

International prices of all the cereals represented in the index fell. Leading the decline, world wheat prices fell by as much as 14.5 percent in July, partly in reaction to the agreement reached between Ukraine and the Russian Federation to unblock Ukraine’s main Black Sea ports, indicating the imminent resumption of grain exports from Ukraine.

Harvests

Seasonal availability from ongoing harvests in the northern hemisphere also weighed on prices.

Nevertheless, international wheat prices were still 24.8 percent above their values in July last year. International prices of coarse grains declined for the fourth consecutive month, down 11.2 percent, but remained 12.1 percent above their values a year ago.

The deal to unblock Ukraine’s ports was also mostly behind a 10.7-percent fall in world maize prices.

Increased seasonal availabilities in Argentina and Brazil, where maize harvests progressed ahead of their pace last year, also helped to ease the pressure on prices.

Spillover from weakness in wheat and maize markets also pressured sorghum and barley prices downwards, respectively, by 12.8 percent and 12.6 percent.

Declined

In July, international rice prices declined for the first time since the onset of 2022, influenced by inconsistent demand and currency movements in major exporters, the FAO report noted.

The FAO Vegetable Oil Price Index averaged 171.1 points in July, down 40.7 points (19.2 percent) and marking a 10-month low.

The sharp drop was driven by falling world prices across palm, soy, rapeseed and sunflower oils. International palm oil prices declined for the fourth consecutive month in July, due primarily to prospects of ample export availabilities out of Indonesia, the world’s leading palm oil exporter.

The FAO Dairy Price Index averaged 146.4 points in July, down 3.8 points (2.5 percent) from June, but still 29.7 points (25.4 percent) above its value in July of last year.

The FAO Meat Price Index averaged 124.0 points in July, down 0.6 points (0.5 percent) from June, marking the first month-on-month decline following six consecutive monthly increases.

The FAO Sugar Price Index averaged 112.8 points in July, down 4.4 points (3.8 percent) from June, marking the third consecutive monthly decline and reaching a five-month low, the report added.