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The United Nations food agency's world commodity price index declined for the fourth consecutive month in July since hitting all-time highs earlier in the year, bringing some relief to parts of the globe that are facing severe food crisis.
However, prices remained 13% higher than in July 2021, as the Russian invasion of Ukraine, which is a major exporter of sunflower oil, maize, barley and wheat, led prices to spike.
The Food and Agriculture Organization's (FAO) index, which tracks the most globally traded food commodities, averaged 140.9 points last month versus a revised 154.3 in June.
“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.
Low-to-middle income sovereigns in the Middle East and Africa region will be among the worst hit by rising food prices and supply shortages that could last through 2024, according to a recent report from S&P. They include Morocco, Lebanon, Egypt and Jordan, which rely on Ukraine for their food supply. Lebanon imports nearly 80% of its wheat from Ukraine.
According to the latest UN index, cereal and vegetable oil prices fell the most, with double-digit percentage declines. The FAO Vegetable Oil Price Index decreased by 19.2% in July from June, marking a 10-month low.
The Cereal Price Index dropped by 11.5% in the month, while remaining 16.6% above its July 2021 value. Prices of all the cereals represented in the index fell. Wheat prices fell the most, as much as 14.5 %, partly in reaction to the agreement reached between Ukraine and the Russian Federation to unblock exports from key Black Sea ports and partly to seasonal availability from ongoing harvests in the northern hemisphere.
Sugar, dairy and meat prices also declined by 3.8%, 2.5% and 0.5%, respectively, the UN index showed.
(Reporting by Brinda Darasha; editing by Cleofe Maceda)
