World Food Prices Dip for Fifth Straight Month in August

By Adedapo Adesanya

The barometer for world food commodity prices declined for the fifth consecutive month in August 2022, as quotations for most benchmark items dropped.

This is according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO). The closely watched FAO Food Price Index averaged 138.0 points in August, down 1.9 per cent from July although remaining 7.9 per cent above its value a year before.

The Index tracks monthly changes in the international prices of a basket of commonly traded food commodities.

The FAO Cereal Price Index decreased by 1.4 per cent from the previous month, a drop driven by a 5.1 per cent decline in international wheat prices that reflected improved production prospects in North America and the Russian Federation as well as the resumption of exports from the Black Sea ports in Ukraine.

Rice prices on average held steady during the month, while quotations for coarse grains increased marginally, by 0.2 per cent, as firmer world maize prices due to hot, dry growing conditions in the European Union and the United States of America were offset by lower barley and sorghum prices.

The FAO Vegetable Oil Price Index decreased by 3.3 per cent from July, reaching a level slightly below that of August 2021.

World soy oil prices rose moderately due to concerns over the impact of unfavourable weather conditions on production in the United States of America, but the gain was more than offset by lower quotations for palm, sunflower, and rapeseed oils, reflecting increased availabilities of palm oil from Indonesia, due to lower export taxes, and a gradual resumption of sunflower oil shipments from Ukraine’s ports.

The FAO Dairy Price Index decreased by 2.0 per cent in August, while remaining 23.5 per cent above its August 2021 value.

World cheese prices increased for the tenth consecutive month, while those of milk eased amid expectations of increased supplies from New Zealand, even as production tracks lower in Western Europe and the United States of America.

The FAO Meat Price Index declined by 1.5 per cent from July, but it remained 8.2 per cent higher its value a year ago. International quotations for poultry meat fell in August amid elevated global export availabilities, while world bovine meat prices declined on weak domestic demand in some leading exporting countries. Pig meat quotations rose.

The FAO Sugar Price Index decreased by 2.1 per cent to its lowest level since July 2021, triggered mainly by high export caps in India and lower ethanol prices in Brazil.

FAO also issued its updated cereal production forecast for 2022, with a significantly lower outlook. Global cereal production is anticipated to decline by 38.9 million tonnes, or 1.4 per cent, from the previous year while the world trade in cereals is predicted to decline by 1.9 per cent in 2022/2023 (July/June) from the year-earlier period to 469.6 million tonnes.