A UN body reported Friday that global food prices had declined for the fifth consecutive month, partly due to the restart of shipments from Ukraine’s Black Sea ports.
As a result of Russia’s invasion of Ukraine in March, the Food and Agriculture Organisation (FAO) food price index, which tracks the monthly change in the international prices of a basket of food commodities, has been progressively declining.
August experienced a minor dip of 1.9%. After a decrease of 3.3%, vegetable oils are now lower than they were a year ago.
The FAO cereals index decreased by 1.4% due to a 5.1% decline in international wheat prices.
According to the FAO, it resulted from “better production prospects in North America and Russia” and the restart of shipments from Ukraine’s Black Sea ports for the first time in over five months.
The FAO reported that global wheat prices remained 10.6 per cent above their August 2007 levels.
Due to a Russian blockade of the Black Sea, exports from Ukraine, one of the world’s largest exporters of wheat, corn, and sunflower oil before the war, were slowed to a trickle.
Under an agreement reached by the UN and Turkey, shipments started in early August.
High cost of cheese
Although dairy prices decreased by 2%, they remained 23.5% higher than in August 2021. Cheese prices rose for the ninth month, while milk prices “eased” due to increasing supplies from New Zealand, despite forecasts of lower production in Western Europe and the United States.
The price of meat decreased by 1.5% but remained around 8% higher than in August of the previous year.
International quotations for chicken decreased due to increased export availability. In contrast, quotations for bovine meat decreased due to weak domestic demand in certain leading exporting nations, while quotations for pig meat increased.
Sugar prices reached their lowest level since July 2021, primarily due to India’s export restrictions and Brazil’s reduced ethanol pricing.
Perspectives for cereals and wheat
FAO has also released its projection for worldwide cereal production for this year, which predicts a decrease of approximately 40 million tonnes, or 1.4%, from the previous year.
Most of this reduction pertains to coarse grains, with maize yields in Europe predicted to fall 16% below their five-year average due to the continent’s exceptionally hot and dry weather conditions.
In contrast, FAO anticipates a “negligible decline” in global wheat production due to anticipated record harvests in Russia and favorable meteorological conditions in North America.
In addition, global rice production is anticipated to drop by 2.1% from its all-time high in 2021.
