World food prices, which rose by 1.3% in July, returned to the previous trend in August, falling by 2.1% in monthly terms, according to a review by FAO (the Food and Agriculture Organization of the United Nations).
The index of world food prices in August amounted to 121.4 points, which is 2.1% lower than in July and 24% lower than the maximum level of March 2022. “Thus, the increase in the index observed in the previous month was leveled. The recorded decline is due to a drop in prices for dairy products, vegetable oils, meat and cereals amid a moderate increase in the sugar price index,” the document says.
The grain price index in August decreased by 0.7% compared to July and by 14.1% in annual terms. World wheat prices fell by 3.8%, largely due to increased supply from active seasonal crop supplies from several leading exporting countries in the Northern Hemisphere. Corn prices declined for the seventh consecutive month and reached their lowest level since September 2020.
Rice prices, on the other hand, increased by 9.8% compared to July and became the highest in the last 15 years. This is due to trade disruptions recorded after India imposed a ban on the export of Indian white rice in July.
The vegetable oil price index in August decreased by 3.1% compared to July after a short-term increase in July. This reflected a drop in global prices for palm, sunflower, soybean, and rapeseed oil. For example, global prices for sunflower oil fell by almost 8% due to weaker import demand amid high supply from major exporters.
The price index for dairy products fell by 4% last month. This is the eighth consecutive month of decline. Compared to August last year, it was 22.4%. In August, whole milk powder fell the most, due to significant supply, especially from Oceania, during the seasonal increase in production and under the influence of a decrease in imports by China.
Global skimmed milk powder prices reached their lowest level since mid-2020 due to sluggish import demand and weak market activity in Europe. Global prices for butter and cheese also fell due to similar factors.
The meat price index in August decreased by 3% compared to July and by 5.4% in annual terms. Lamb prices showed the largest decline, largely driven by a sharp rise in export supply, primarily from Australia, and weaker demand from China. The fall in pork prices was primarily due to low demand from major importing countries and strong export supply in Europe amid declining domestic sales. Poultry prices declined due to strong supply, especially from Brazil. Beef prices fell due to the high number of slaughter animals in a number of major producing countries and weak import demand.
In August, the sugar price index increased by 1.3% compared to July and by 34.1% in annual terms. This was mainly due to growing concerns about the El Niño weather phenomenon, which could lead to a decrease in expected global production.
The FAO Food Price Index is a weighted average indicator that tracks the dynamics of international prices for five major food commodity groups.
