The end of the Black Sea deal helped to lift global food prices in July.
The Food and Agriculture Organization of the United Nations (FAO) reported Friday its food price index averaged 123.9 points in July, up 1.3% from a month earlier, although still nearly 12% below the same month last year.
The bulk of the month-over-month increase in the July food price index was driven by a sharp jump in the FAO Vegetable Oil Price Index, which rose 12.1% from June after seven months of consecutive declines. International sunflower oil prices rebounded by more than 15% in the month, due mostly to renewed uncertainties surrounding the exportable supplies after Russia exited an agreement that allowed for the sale passage of Ukraine agricultural commodities from Black Sea ports. World prices for palm, soy and rapeseed oils also increased in July on concerns over output prospects in leading producing countries.
On the other hand, the FAO Cereal Price Index declined in July, as a drop in coarse grain values more than offset gains in wheat. International coarse grain prices were down 4.8% in the month, mainly due to increased seasonal supplies from corn harvests in Argentina and Brazil, as well as expectations for a larger corn crop in the US this year. However, international wheat prices rose by 1.6%, the first monthly increase in nine months, due to uncertainty over exports from Ukraine as well as continued dry conditions in North America.
New Indian trade restrictions on rice buoyed the headline food price index as well, with the FAO All Rice Price Index climbing 2.8% on the month and 19.7% on the year to reach its highest nominal level since September 2011. India’s July 20 trade restrictions put further upward pressure on rice prices that were already rising due to seasonally tighter supplies, the FAO said, adding that higher rice prices substantially increase food security concerns for “a large swathe of the world population, especially those that are most poor and who dedicate a larger share of their incomes to purchase food.”
The FAO Meat Price Index was down 0.3% in July, while the Dairy Index dropped 0.4%. The Sugar Index declined a more substantial 3.9% during the month.
The FAO Food Price Index, which tracks monthly changes in the international prices of globally traded food commodities, hit its highest on record in March 2022 following the Russian invasion of Ukraine. The Index trended gradually lower for a year until a modest increase in April this year. The Index turned lower again in May and June before the July increase.
Source : Syngenta.ca