Global food prices ‘declined significantly’ in July, says UN agency

World meals costs “declined considerably” final month, the Meals and Agriculture Organisation (FAO) mentioned on Friday, warning nevertheless of persisting uncertainties over future manufacturing. 

The FAO Meals Value Index, which measures the month-to-month change in worldwide costs of a basket of meals commodities, averaged 140.9 factors in July, down 8.6 per cent from June.

This was the steepest month-to-month fall within the worth of the index since October 2008 in addition to the fourth consecutive month-on-month decline.

The Index however remained 13.1 per cent greater than in July 2021.

“The decline in meals commodity costs from very excessive ranges is welcome, particularly when seen from a meals entry viewpoint,” FAO Chief Economist Maximo Torero mentioned in an announcement.

“Nevertheless, many uncertainties stay, together with excessive fertilizer costs that may influence future manufacturing prospects and farmers’ livelihoods, a bleak international financial outlook, and forex actions, all of which pose critical strains for international meals safety,” he added. 

The FAO Vegetable Oil Value Index registered the largest decline, dropping by 19.2 per cent in July from June to succeed in its lowest stage in 10 months. 

The Cereal Value Index, in the meantime, declined by 11.5 per cent from June however remained 16.6 per cent above its July 2021 stage. 

The month-on-month drop was led by a pointy decline in wheat costs (-14.5 per cent) that’s partly attributed to the market response to the announcement that Moscow and Kyiv had reached a deal to permit for the secure export of hundreds of thousands of tonnes of grains caught in Ukrainian ports in addition to to seasonal availability from ongoing harvests within the northern hemisphere.

The indices for sugar, dairy and meat additionally fell however to a lesser extent.

The FAO Meals Value Index reached a document excessive of 159.7 factors in March, rising 12.6 per cent from February when it had already reached its highest stage since its inception in 1990, resulting from Russia’s warfare on Ukraine. 

Collectively, Russia and Ukraine, accounted for round 30 per cent and 20 per cent of worldwide wheat and maize exports, respectively, over the previous three years, in line with the FAO.