World food prices post biggest decline since July 2008
Bloomberg: Global food prices fell the most since 2008 after concerns over supplies of grains and vegetable oils eased as Ukraine moved toward restarting exports, said the Food and Agriculture Organisation of the United Nations (FAO) reported yesterday.
According to the FAO Food Price Index, food costs plunged almost 9% in July. The index fell to the lowest since January, before Russia’s blockade of ports in Ukraine a major food exporter pushed up food costs to a record, with major cereal and vegetable oil prices recording double-digit percentage declines. The closely-watched FAO Food Price Index averaged 140.9 points in July, down 8.6% from June, marking the fourth consecutive monthly decline since hitting all-time highs earlier in the year. Still, prices remain elevated, putting pressure on low-income households and worsening global hunger. The Index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, nevertheless, remained 13.1% higher than in July 2021. “The decline in food commodity prices from very high levels is welcome, especially when seen from a food access viewpoint; however, many uncertainties remain, including high fertilizer.prices that can impact future production prospects and farmers’ livelihoods, a bleak global economic outlook, and currency movements, all of which pose serious strains for global food security,” said FAO Chief Economist Maximo Torero.
The FAO Vegetable Oil Price Index decreased by 19.2% in July from June, marking a 10-month low. International quotations for all oil types fell, with palm oil prices declining due to prospects of ample export availabilities out of Indonesia, those of rapeseed oil responding to expectations of ample new crop supplies, and soy oil prices down due to protracted sluggish demand.
Sunflower oil prices also dropped markedly amid subdued global import demand despite continued logistical uncertainties in the Black Sea region. Lower crude oil prices also pressured vegetable oil values down.