Global food prices continue decreasing after the record growth

After record growth, global food commodity prices continue to decrease over the course of the last 4 months. The most significant reduce was in July as Ukraine restarts exports.

The U.N. Food and Agriculture Organization’s (FAO) Food Price Index indicates a decrease in the prices. The Index averaged 140.9 points in July, down 8.6% from June, but remained 13.1% higher than in July 2021.

The Index measures the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity groups — cereal, vegetable oil, meat, dairy products and sugar. The FAO Cereal Price Index dropped by 11.5% in July from June, while remaining 16.6 % above its July 2021 value. The FAO Vegetable Oil Price Index decreased by 19.2%, marking a 10-month low. The FAO Meat Price Index was also down by 0.5%. The FAO Dairy Price Index decreased by 2.5% from June, but it still averaged 25.4% above its July 2021 value. The FAO Sugar Price Index fell by 3.8% from June.

However, there is much uncertainty about further price dynamics, mainly due to high fertilizer prices affecting crop forecasts and farmer welfare, a negative global outlook and currency movements. All this creates severe tension regarding the world’s global security.

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