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World food prices decline in June but remain very high

18 July 20222 min reading

The barometer for world food commodity prices declined slightly in June for the third consecutive month, the Food and Agriculture Organization of the United Nations (FAO) reported. The FAO Food Price Index averaged 154.2 points in June 2022, down 2.3 percent from May. The Index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, remained, however, 23.1 percent higher than in June 2021.

The drop in June reflected declines in the international prices of vegetable oils, cereals and sugar, while dairy and meat prices increased.

The FAO Cereal Price Index averaged 166.3 points in June, down 4.1 percent from May, but still 27.6 percent above its June 2021 value. International wheat prices fell by 5.7 percent in June but remained 48.5 percent above their values a year ago. The decline in June was driven by seasonal availability from new harvests in the northern hemisphere, improved crop conditions in some major producing countries, and higher production prospects in the Russian Federation. International coarse grain prices also fell by 4.1 percent but were still up 18.4 percent from their year-earlier values. World maize prices fell by 3.5 percent month-on-month due to increased seasonal availabilities in Argentina and Brazil and improved crop conditions in the United States of America.

The FAO Vegetable Oil Price Index averaged 211.8 points in June, down 7.6 percent month-on-month. World palm oil prices declined on seasonally rising output of major producing countries and prospects of increasing supplies from Indonesia. Meanwhile, world sunflower and soy oil prices declined due to subdued global import demand in the wake of rising costs.

The FAO Sugar Price Index averaged 117.3 points in June, down 2.6 percent from May, marking the second consecutive monthly decline and reaching its lowest level since February, influenced by good global availability prospects. Slowing global economic growth also weighed on international sugar demand and prices.

“Although the FAO Food Price Index dropped in June for the third consecutive month, it remained close to the all-time high of March this year. The factors that drove global prices high in the first place are still at play, especially a strong global demand, adverse weather in some major countries, high production and transportation costs, and supply chain disruptions due to COVID-19, compounded by the uncertainties stemming from the ongoing war in Ukraine,” said Máximo Torero Cullen, FAO Chief Economist.

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