World food prices fell sharply in July, driven down by cereal and vegetable oil prices, the Food and Agriculture Organization of the United Nations (FAO) said on Friday.
After a historic high reached in March following the invasion of Ukraine, the FAO food price index, which tracks the variation in international prices of a basket of basic products, has fallen by 8 .6% over one month, marking a fourth consecutive decline.
However, it remains at high levels, standing at 140.9 points in July, with an increase of 13.1% over one year compared to June 2021, underlines the agency.
Máximo Torero Cullen, FAO chief economist, hails a ‘welcome drop, especially from the point of view of access to food’, recalling however that many risks still weigh on global food security, such as a recession or ‘high fertilizer prices and their potential impact on production and farmers’ livelihoods’.
The FAO vegetable oil price index fell in July by 19.2%, ‘thus falling to its lowest level for 10 months’, under the effect of a fall in the prices of all oils combined and in prices crude oil.
Abundant availability of palm oil for export in Indonesia and a good rapeseed harvest are pushing down these prices, to which is added a sluggish import demand for sunflower oil – including Ukraine is a major producer -, which shows a marked decline.
The FAO Cereals Index slumped 11.5%, ‘the biggest drop being due to world wheat prices, which lost no less than 14.5% in reaction to the agreement between Ukraine and the Russian Federation regarding the unblocking of the main ports of the Black Sea”, underlines the organization.
Since the signing of this long-awaited agreement on July 22, a first ship, the freighter Razoni, set sail on Monday from Odessa following five months of total inactivity in the ports. Three new shipments of grain also left Ukraine on Friday, said Turkey, which oversees the implementation of these exports.
The FAO Sugar Price Index also fell 3.8% as lower ethanol prices led to higher-than-expected sugar production in Brazil during the month of July’. Favorable production prospects in India also contributed to this decline, offsetting concerns regarding European sugar beet yields.
/ATS
