The UN company has revealed its newest eagerly awaited Meals Worth Index, the barometer that tracks month-to-month modifications within the worldwide costs of 5 meals commodities: cereals, vegetable oils, dairy merchandise, meat, and sugar.
The @FAO Meals Worth Index averaged 140.9 factors in July, 🔻8.6% from June, marking the 4th consecutive month-to-month decline. Main cereal & vegetable oil costs recorded double-digit share decline.The Index remained 13.1 % greater than in July 2021.👉 https://t.co/YW5pp7MWEg pic.twitter.com/m3IZaJQntg— FAO Newsroom (@FAOnews) August 5, 2022
The index averaged 140.9 factors in July, or 8.6 factors down from June. The decline was led by double-digit share drops in the price of vegetable oils but in addition cereals, with the current UN-brokered deal on Ukrainian grain exports a contributing issue.
Welcome however cautious
“The decline in meals commodity costs from very excessive ranges is welcome, particularly when seen from a meals entry viewpoint,” mentioned Maximo Torero, FAO Chief Economist.
“Nonetheless, many uncertainties stay, together with excessive fertilizer costs that may impression future manufacturing prospects and farmers’ livelihoods, a bleak international financial outlook, and forex actions, all of which pose severe strains for international meals safety.”
In July, FAO’s Vegetable Worth Index decreased by 19.2 per cent in comparison with June, marking a 10-month low. Worldwide quotations for all oil sorts fell, the company mentioned, with palm oil costs declining attributable to prospects of ample export availability out of Indonesia, for instance.
Moreover, sunflower oil costs additionally dropped markedly amid subdued international import demand, regardless of continued logistical uncertainties within the Black Sea area. Vegetable oil values have been additionally pushed down by decrease crude oil costs.
Black Sea export deal
The Cereal Worth Index additionally mirrored an 11.5 per cent decline final month, although remaining 16.6 per cent above July 2021. Costs of all cereals within the index declined, led by wheat.
World wheat costs dropped by as a lot as 14.5 per cent, FAO mentioned, partly in response to the Russia-Ukraine deal on grain exports from key Black Sea ports, and likewise due to seasonal availability from ongoing harvests within the northern hemisphere.
July additionally noticed an 11.2 per cent decline in coarse grain costs. Maize was down 10.7 per cent, once more due partially to the Black Sea Grain Initiative and elevated seasonal availabilities in Argentina and Brazil. Moreover, worldwide rice costs additionally declined for the primary time this yr.
The Sugar Worth Index fell by practically 4 per cent, amid considerations over demand prospects attributable to expectations of an extra international financial slowdown, a weakening in Brazil’s forex, the actual, and decrease ethanol costs leading to larger sugar manufacturing there than beforehand anticipated.
The downward pattern was additionally influenced by indications of larger exports and beneficial manufacturing prospects in India. In the meantime, the new and dry climate in European Union international locations additionally sparked considerations over sugar beet yields and prevented sharper declines.
FAO additional reported that the Dairy Worth Index decreased 2.5 per cent “amid lacklustre buying and selling exercise”, but nonetheless averaged 25.4 per cent above final July.
Whereas the costs of milk powders and butter declined, cheese costs remained secure, boosted by demand in European tourism locations.
Blended image for meat
Meat costs additionally continued the downward pattern, dropping by half a per cent from June attributable to weakening import calls for. Nonetheless, poultry costs reached an all-time excessive, boosted by agency import demand and tight provides attributable to Avian influenza outbreaks within the northern hemisphere.
The FAO Meat Worth Index was additionally down in July, by 0.5 p.c from June, attributable to weakening import demand for bovine, ovine and pig meats. In contrast, worldwide poultry meat costs reached an all-time excessive, underpinned by agency international import demand and tight provides attributable to Avian influenza outbreaks within the northern hemisphere.