FAO reports 8.6% drop in world food prices

World food prices have been declining for the fourth month in a row, falling by 8.6% in July, informed Food and Agriculture Organization of the United Nations (FAO).

“The FAO Food Price Index average continued to decline for the fourth month in a row and stood at 140.9 points in July, down 13.3 points (8.6%) from its June level,” the statement said.

The drop that occurred was the sharpest since October 2008 and was primarily due to a 19.2% decline in the cost of vegetable oils. The FAO explained that such a sharp decline in oil prices was due to falling prices for palm oil (due to the expected significant increase in supply in Indonesia), as well as soybean and rapeseed oils (due to a long period of sluggish demand and an expected rich harvest).

Grain prices fell by 11.5% over the month, but the excess of last year’s figure is still significant: 16.6%. Wheat fell 14.5%, partly due to the Istanbul “grain deal” and the harvest in the Northern Hemisphere. Wheat prices in July were 24.8% higher than last year, draw attention to the FAO.

Dairy products fell in price by 2.5% over the month compared to June, and meat prices after a six-month increase fell by 0.5%. Sugar fell in price by 3.8%.

Earlier in July, UN Secretary-General António Guterres declaredthat a sharp rise in food and energy prices awaits 94 countries with a population of approximately 1.6 billion people.

On July 22, Ukraine and Turkey signed an agreement with the UN on the export of grain, as well as other food products and fertilizers, from the blocked Ukrainian ports of Odessa, Chornomorsk and Yuzhny. A similar agreement was signed by Russia with representatives of Turkey and the UN. The signing ceremonies were held in Istanbul at the Dolmabahce Palace in the presence of Turkish President Recep Tayyip Erdogan and UN Secretary General António Guterres.

On August 2, the official representative of the Russian Foreign Ministry, Maria Zakharova warned The West from not fulfilling the second part of the “grain deal” – the removal of restrictions on the export of Russian food and fertilizers. Otherwise, the world may not receive tens of millions of tons of Russian grain, she noted.

Subscribe on Vedomosti on Telegram and stay up to date with the main economic and business news.