The Food and Agriculture Organization (FAO) of the United Nations announced that global food commodity prices held steady for the second consecutive month in July. This stability was achieved despite a rise in the international prices of vegetable oils, meat products, and sugar, which balanced out the continued decline in cereal prices.
The FAO Food Price Index, which measures monthly changes in the international prices of a basket of food commodities, averaged 120.8 points in July. This slight drop from June's revised figure of 121.0 points represents a 3.1 percent decrease compared to the same period last year.
FAO Cereal Price Index fell by 3.8 percent from June, marking the second month of declining global export prices for major cereals. Wheat prices decreased due to increased seasonal availability from ongoing winter harvests in the northern hemisphere, along with favorable conditions in Canada and the United States predicting a large spring wheat harvest. Maize export prices also dropped, thanks to faster-than-expected harvests in Argentina and Brazil, and robust crop conditions in the United States. Additionally, the FAO All-Rice Price Index saw a 2.4 percent decline, reflecting generally quiet trading activities for both Indica and Japonica rice varieties.
Conversely, the FAO Vegetable Oil Price Index rose by 2.4 percent from June, reaching its highest level in a year and a half. The increase was driven by rising global prices for palm, soy, sunflower, and rapeseed oils. This was attributed to strong demand for soy oil from the biofuel sector and worsening crop prospects for sunflower and rapeseed oils in several major producing countries.
The FAO Meat Price Index experienced a 1.2 percent increase in July, fueled by strong import demand for ovine, bovine, and poultry meat. However, pig meat prices saw a slight decline due to an oversupply situation in Western Europe.
The FAO Sugar Price Index edged up by 0.7 percent from June. This increase was largely due to lower-than-expected production in Brazil, which offset the impact of improved monsoon rainfall in India and favorable weather conditions in Thailand.
Lastly, the FAO Dairy Price Index remained unchanged in July. Decreases in milk powder prices were balanced by increases in butter and cheese quotations.
This balance in food commodity prices highlights the dynamic nature of global agricultural markets, influenced by various factors ranging from seasonal harvests to international demand and weather conditions.
