GLOBAL – The FAO Food Price Index, which tracks monthly changes in the international prices of certain globally traded food commodities, averaged 120.8 points in July, marginally below its revised 121.0 figure for June, according to the recent update from the Food and Agriculture Organization (FAO) of the United Nations.

This decline was driven primarily by a reduction in cereal prices, which outweighed increases in vegetable oil, meat products, and sugar prices.

The dairy index remained relatively stable during this period. Despite the drop, the FFPI is still 3.1 percent lower than in the same month last year and 24.7 percent below its peak of 160.3 points reached in March 2022.

The FAO Cereal Price Index fell to an average of 110.8 points in July, down by 3.8 percent from June and 12.0 percent from July 2023.

The decrease in global cereal prices continued for the second consecutive month, influenced by increasing seasonal availability from ongoing northern hemisphere winter wheat harvests and favorable crop conditions in Canada and the United States.

This resulted in lower international wheat prices, exacerbated by strong competition among exporters and weak global demand. Maize prices also declined due to seasonal pressure, improved harvests in Argentina and Brazil, and favorable crop conditions in the U.S.

World prices for barley and sorghum also fell in July, while the FAO All Rice Price Index dropped by 2.4 percent, reflecting subdued trading activities.

Conversely, the FAO Vegetable Oil Price Index increased to 135.0 points in July, marking a 2.4 percent rise from June and reaching a one-and-a-half-year high.

This uptick was driven by higher global prices for palm, soy, sunflower, and rapeseed oils. The rise in palm oil prices was attributed to strong global import purchases and slower output growth in Indonesia.

Soy oil prices increased for the third consecutive month due to robust demand from the biofuel sector in the Americas. Prices for sunflower and rapeseed oils also rose, primarily due to deteriorating crop prospects in key producing countries for the 2024/25 season.

 

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