According to the United Nations Food and Agriculture Organization, world food prices fell for the third month in a row in June, but remained close to record highs set in March.
The Food and Agriculture Organization’s (FAO) food price index, which examines the world’s most commonly traded food commodities, averaged 154.2 points last month, down from 157.9 in May.
The previous month’s total was 157.4.
Despite the monthly decline, the June index was still 23.1% higher than a year ago, thanks to the Russian invasion of Ukraine, concerns about severe weather, healthy global demand, and high production and transportation costs.
“The factors that drove global prices high in the first place are still at play,” said FAO Chief Economist Maximo Torero Cullen.
The FAO raised its forecast for world grain production in 2022 from 2.784 billion tonnes to 2.792 billion tonnes based on independent estimates of wheat supply and demand. This is still 0.6% less than world output in 2021.
The FAO cereal index declined 4.1 per cent from May, but was still up 27.6 per cent year on year. According to FAO, the June drop was due by seasonal availability from new harvests in the northern hemisphere, improved crop conditions in certain major producing countries, and increased output prospects in Russia.
The vegetable oil price index fell 7.6 per cent month on month, owing to seasonally greater output in key producing countries and the possibility of increased Indonesian supplies.
The sugar index decreased 2.6 per cent from May to June, as global economic growth slowed.
The meat index increased by 1.7 per cent in June, reaching a new high, while the dairy index increased by 4.1 per cent month on month. Worldwide milk powder prices rose due to strong import demand and prolonged global supply constraints.
According to FAO, the improved prediction for cereal output was mostly driven by a 6.4-million-tonne increase in coarse grain production estimates.
The prediction for global grain consumption in 2022/23 has also been increased by 9.2 million tonnes to 2.797 billion tonnes. However, this represented a 0.1 per cent decrease from 2021/22 levels, owing primarily to lower feed consumption predictions.
FAO anticipated that global cereal stocks will amount 854 million tonnes at the end of the season in 2023, up 7.6 million tonnes from last month’s forecast but still down 0.6 percent year on year.
(Adapted from USNews.com)