The benchmark for world food commodity prices declined significantly in July, with major cereal and vegetable oil prices recording double-digit percentage declines, the Food and Agriculture Organization of the United Nations (FAO) has reported.
The FAO Food Price Index averaged 140.9 points in July, down 8.6 per cent from June, marking the fourth consecutive monthly decline since hitting all-time highs earlier in the year.
The Index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, nevertheless, remained 13.1 per cent higher than in July 2021.
“The decline in food commodity prices from very high levels is welcome, especially when seen from a food access viewpoint; however, 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,” FAO Chief Economist Maximo Torero said.
The FAO Vegetable Oil Price Index also decreased by 19.2 per cent in July from June, marking a 10-month low.
International quotations for all oil types fell, with palm oil prices declining due to prospects of ample export availabilities out of Indonesia, those of grapeseed oil responding to expectations of ample new crop supplies, and soy oil prices down due to protracted sluggish demand, the FAO noted.
It the report said sunflower oil prices also dropped markedly amid subdued global import demand despite continued logistical uncertainties in the Black Sea region.
Lower crude oil prices also pressured vegetable oil values down.
The FAO Cereal Price Index dropped by 11.5 per cent in the month, while remaining 16.6 per cent above its July 2021 value.
Prices of all the cereals represented in the index fell, led by wheat, for which world prices declined by as much as 14.5 per cent, partly in reaction to the agreement reached between Ukraine and Russia to unblock exports from key Black Sea ports and partly to seasonal availability from ongoing harvests in the northern hemisphere, the report explained.
Additionally, world coarse grain prices declined by 11.2 per cent in July, with those of maize down by 10.7 per cent, also due in part to the Black Sea agreement as well as increased seasonal availabilities in Argentina and Brazil.
International rice prices also declined for the first time in 2022. The FAO Meat Price Index was also down in July, by 0.5 per cent from June, due to weakening import demand for bovine 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, the report added.