Food prices decline in July 2022
By: Sydney Sheffield
The Food and Agriculture Organization of the United Nations (FAO) has released the FAO Food Price Index (FFPI) for July 2022. The FFPI is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups. This month’s FFPI contains good news, as the July price index dropped significantly.
The index averaged 140.9 points in July, or 8.6 points down from June. The decline was led by drops in the cost of vegetable oils and cereals, due to the recent United Nations-brokered deal on Ukrainian grain exports. The vegetable Price Index decreased by 19.2% compared to June, the lowest in over 10 months. International quotations for all oil types fell, with palm oil prices declining due to prospects of ample export availability out of Indonesia, for example. Additionally, sunflower oil prices also dropped due to restrained global import demand, despite the logistical uncertainties in the Black Sea region. Vegetable oil values also declined as a result of lower crude oil prices.
“The decline in food commodity prices from very high levels is welcome, especially when seen from a food access viewpoint,” said Maximo Torero, FAO Chief Economist, in a press release. “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.”
The FAO Meat Price Index was also down in July, by 0.5% from June, due to weakening import demand for bovine, ovine, and pig meats. By contrast, international poultry meat prices reached an all-time high, underpinned by firm global import demand and tight supplies due to Avian influenza outbreaks in the northern hemisphere. FAO Dairy Price Index averaged 146.4 points in July, down 3.8 points from June, but still 29.7 points above its value in July of last year. International quotations for skim milk powder registered the steepest decline, followed by those of butter and whole milk powder.
The FFPI marks the fourth consecutive month of decline. Read the full report for July 2022 here.