World food prices rose slightly in July after falling in the previous two months

World food prices rose slightly in July after declining in the previous two months, the UN Food and Agriculture Organization (FAO) said. The FFPI food price index rose to 123.9 points (up 1.3% compared to June), but at the same time decreased by 11.8% compared to July 2022. The FAO explains the growth by June with the termination of the grain deal and the introduction of new restrictions on rice trade. To clarify, when calculating sub-indices for food types, FAO compares their current value with average export prices in 2014-2016.

In July, there was a sharp increase in the price index for vegetable oils – up to 129.8 points (plus 12.1% against June), and this is the first increase after seven months of decline. Prices for sunflower oil increased by more than 15% over the month, the main reason is the uncertainty with export supplies due to the termination of the grain deal. The cost of palm, soybean and rapeseed oils also rose against the backdrop of not very good harvest prospects in the leading producing countries.

The grain price index in July slightly decreased – by 0.5%, to 125.9 points. The reasons are a drop of 4.8% in world quotations of forage crops. Prices for corn continued to decline, prices for sorghum decreased, the price of barley remained stable under the influence of the situation on the wheat market – for the first time in the last nine months, prices for it rose (by 1.6%). The reasons are the uncertainty with exports from Ukraine in connection with the withdrawal of the Russian Federation from the grain deal and damage to the Ukrainian port infrastructure, as well as drought in North America. The rice price index rose 2.8% from June to its highest level since September 2011.

A slight decrease was shown by the price indices for dairy products (by 0.4%, to 116.3 points) and meat (minus 0.3%, to 117.8 points). At the same time, if the cost of beef, lamb and poultry meat decreased, then pork prices increased. Significantly, by 3.9%, to 146.3 points, the price index for sugar decreased. The decline was driven by a strong harvesting campaign in Brazil, increased rainfall in most growing areas in India, and weak demand from Indonesia and China, the world’s largest sugar importers.

Venera Petrova