Adedapo Adesanya
By Adedapo Adesanya
Global food commodity prices fell in July for the second consecutive month led by cereals, vegetable oil and dairy, the Food and Agriculture Organisation of the United Nations (FAO) has disclosed in its latest Food Price Index report released on Thursday.
The index tracks the international prices of the most commonly traded food commodities.
The FAO Food Price Index averaged 123.0 points in July 2021, down 1.2 per cent from June but still 31.0 per cent higher than its level in the same period last year.
Business Post had reported that in June, the global price of food dropped for the first time in 12 months as a result of declines in the prices of vegetable oils, cereals and, though more moderately, dairy products.
According to the Rome-based agency, the drop in July reflected declines in prices of cereals, dairy products and vegetable oils which more than offset increases in meat and sugar quotations for the second consecutive month.
Giving a breakdown, the FAO Cereal Price Index was 3.0 per cent lower in July than in June, pushed down by a 6.0 per cent month-on-month drop in international maize prices associated with better-than-earlier projected yields in Argentina and improved production prospects in the United States of America, even as crop conditions in Brazil remained a concern.
Prices of other coarse grains such as barley and sorghum also dropped significantly, reflecting weaker import demand.
However, wheat quotations edged 1.8 per cent higher in July – reaching their highest level since mid-2014 – in part due to concerns over dry weather and crop conditions in North America.
At the same time, international rice prices hit two-year lows, impacted by currency movements and a slow pace of sales caused by high freight costs and logistical hurdles.
The FAO Dairy Price Index declined 2.8 per cent from June, impacted by slower market activity in the Northern hemisphere due to ongoing summer holidays, with skim milk powder registering the largest drop, followed by butter, whole milk powder and cheese.
The FAO Vegetable Oil Price Index reached a five-month low, declining 1.4 per cent from June, as lower prices for soy, rape and sunflower seed oils more than offset rising palm oil values.
A lower biodiesel blending mandate in Argentina pressured soy oil prices lower, while those for rape and sunflower oils were influenced by prospective record supplies for the 2021/22 season.
In contrast, the FAO Sugar Price Index increased by 1.7 per cent in July, its fourth monthly increase. The rise was mostly related to firmer crude oil prices as well as uncertainties over the impact of recent frosts on yields in Brazil, the worlds largest sugar exporter, while good production prospects in India prevented a larger jump.
The FAO Meat Price Index rose marginally from June, with quotations for poultry meat rising the most due to increased imports by East Asia and limited production expansions in some regions.
Bovine meat prices also strengthened, buoyed by high imports from China and lower supplies from major producing regions. Meanwhile, pig meat prices fell, following a decline in imports by China.
