The monthly index of world food prices fell sharply in July, down 8.6% from June, the biggest one-month drop since 2008, according to a report released by the United Nations’ Food and Agriculture Organization (FAO) on Friday.
The drop in food prices came after a an agreement was reached in July to allow grain shipments from Ukraine and after adjustments were made to the global supply chain, which has helped ease price pressures, FAO said.
As a key index that measures monthly changes in global prices of a food basket, the FAO Food Price Index averaged 140.9 points in July, the fourth consecutive monthly decline. Despite the trend since July, the index is still 13.1% above what it was a year ago.
The index’s five major components retreated in July, resulting in a 19.2% drop in vegetable oil prices and an 11.5% drop in grains and cereals. The FAO said the development was partly related to the key agreement to open up key Black Sea ports in Ukraine allow grain export from the countryone of the world’s largest grain producers.
“The market reacts to expectations, the market reacts very quickly. So the day they announced the deal, futures prices are subject to a decline,” said Maximo Torero Cullen, FAO chief economist.
He then said that uncertainties remain, including expensive fertilizers and a bleak global economic outlook, which could put enormous pressure on global food security despite somewhat encouraging developments in the global food market.
The FAO Food Price Index is based on world prices for 23 food categories covering prices for 73 different products based on a base year.
Russia and Ukraine agree to reopen Ukraine’s Black Sea ports for grain exports
World food prices fall amid relief from resumption of grain exports from Ukraine: FAO – SABC News
Source link World food prices fall amid relief from resumption of grain exports from Ukraine: FAO – SABC News