World food commodity prices have dropped for the fifth month in a row in August as quotations for most benchmark items declined, according to the Food and Agriculture Organisation of the United Nations (FAO).

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, fell by 1.9% to 138.0 points last month although remaining 7.9% above 2021 levels.

A 5.1% drop in international wheat prices drove down the cereal price index which declined by 1.4%. Wheat prices reflected improved production prospects in North America and Russia as well as the resumption of exports from Ukraine.

The FAO Food Price Index for vegetable oil fell by 3.3% from July, reaching a level slightly below that of August 2021. World soy oil prices rose moderately, however this was more than offset by lower quotations for palm, sunflower and rapeseed oils.

Lower quotations for oils reflected increased availabilities of palm oil from Indonesia, due to lower export taxes and a gradual resumption of sunflower oil shipments from Ukraine’s ports, the FAO said.

Both price indices for dairy and meat decreased by 2.0% and 1.5% respectively. However, at 143.5 points, the dairy price index remained 23.5% above its 2021 value, while the value of beef, at 122.7 points, is still 8.2% higher.

World cheese prices increased for the tenth consecutive month, while those of milk eased, according to the latest FAO Food Price Index for dairy.

International quotations for poultry meat fell in August amid elevated global export availabilities, while world bovine meat prices declined on weak domestic demand in some leading exporting countries. Pig meat quotations rose, the FAO said.

FAO cereal production outlook

The FAO’s most recent cereal production forecast for 2022 points to significantly lower global cereal production, which is anticipated to drop by 38.9 million tonnes.

EU maize yields are expected to fall 16% below their five-year average level due to the exceptional hot and dry weather conditions, according to the FAO’s Cereal Supply and Demand Brief.

However, the forecast for world wheat production has been raised to 777 million tonnes due to expected record harvests in Russia and conducive weather conditions in North America.

World cereal utilisation for 2022/2023 is now pegged at 2.79 billion tonnes, while global cereal stocks at the close of the 2023 seasons are expected to contract by 2.1% to 845 million tonnes.

World trade in cereals is predicted to decline by 1.9% in June and July next year from the year-earlier period to 469.6 million tonnes, according to the updated FAO cereal production outlook.