Global food commodity prices have dropped in July, with vegetable oils and cereals leading the decline in the food price index, according to the Food and Agriculture Organisation of the United Nations (FAO).
Cereal and vegetable oil prices recorded significant double-digit declines last month, dropping by 11.5% and 19.2% respectively, compared to one month prior.
The FAO Food Price Index dropped by 8.6% averaging 140.9 points in July, which is its fourth decline in a row since hitting all-time highs earlier this year.
However, the FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, remained 13.1% higher than in July 2021.
FAO chief economist, Maximo Torero, welcomed the decline in food commodity prices. However, he said:
“Many uncertainties remain, including high fertiliser 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.”
The FAO price index for vegetable oils marked a 10-month low, falling by 19.2% within one month, due to lower international quotations for all oil types, according to the FAO.
Palm oil prices fell due to prospects of ample export availabilities out of Indonesia, while rapeseed oil prices responded to expectations of new crop supplies. Lower prices for soy oil, sunflower oil and crude oil also pressured overall values down.
The cereal price index remained 16.6% above its July 2021 level, despite falling by 11.5% last month. Wheat prices, which fell by 14.5%, led the decline across prices of all cereals represented in the FAO index.
Lower wheat price were partly due to the agreement reached between Ukraine and Russia to unblock exports from key Black Sea ports, and seasonal availability from ongoing harvests in the northern hemisphere, the FAO said.
World coarse grain prices were down by 11.2% in July, with those of maize falling by 10.7%. International rice prices declined for the first time this year, and the sugar price index fell by 3.8%.
Dairy and meat
The FAO dairy price index fell by 2.5% averaging 146.6 points in July, however, the index is still 25.4% higher than during the same month last year.
International quotations for skim milk powder (SMP) registered the steepest decline, followed by those of butter and whole milk powder (WMP). Global cheese prices remained stable, according to the FAO.
The FAO Food Price Index for meat fell only slightly in July (-0.5%), averaging 124.0 points, which marks the first month-on-month decline after six consecutive increases.
While international quotations for ovine meat and bovine meat dropped, weak overall import demand kept pigmeat prices stable, according to the FAO.
Global poultry meat prices reached an all-time high, which was underpinned by firm import demand and tight global supplies due to avian influenza outbreaks in the northern hemisphere.