World Food Price Index Rebounds In July As Vegetable Oils Rise
In July, the global price index of the United Nations’ food agency rebounded from its two-year lows, driven by an upturn in vegetable oil markets due to renewed tensions over grain exports from Ukraine and concerns about worldwide production.
The Food and Agriculture Organisation (FAO) stated that the price index, which monitors the most widely traded food commodities globally, averaged 123.9 points in July, up from a revised 122.4 in the previous month.
The initial reading for June was 122.3, representing the lowest index value since April 2021.
Comparatively, the July score was nearly 12% lower than the corresponding period a year prior and 22% below the peak recorded in March 2022, shortly after the commencement of Russia’s incursion into Ukraine.
The FAO highlighted a 12% climb in the vegetable oil price index in comparison to June, marking the end of a seven-month streak of decreasing values.
Sunflower oil specifically surged by over 15% month-on-month, primarily due to uncertainty stemming from Russia’s withdrawal from the Black Sea Grain Initiative, which influenced shipments from Ukraine.
Additionally, production concerns and the escalation of crude oil prices contributed to the upward movement of other vegetable oils.
In July, the FAO’s cereal price index experienced a marginal 0.5% decline, with reductions in coarse grain markets offsetting gains in wheat and rice prices.
Maize prices decreased due to the anticipated replenishment of stocks from harvesting in South America and US production.
Conversely, concerns over Ukrainian exports and dry weather conditions in North America pushed wheat prices higher. Moreover, the rice index surged to its highest level in almost 12 years, driven by an Indian export embargo.
The FAO reiterated its concerns about the rising cost of rice, emphasizing substantial food security worries for a significant portion of the global population, particularly the most economically disadvantaged.
Sugar Price and Other Categories
The sugar price index declined by nearly 4% in July, marking the second consecutive monthly decrease due to favorable supply outlooks in Brazil and India. Nonetheless, sugar prices remained almost 30% higher than the previous year.
Dairy and meat prices, as referenced by the FAO, both experienced slight drops in July.