The UN food agency’s global price index dropped to a two-year low in August as major food commodities declined while rice and sugar rose, erasing a bounce from July.
On Friday, the Food and Agriculture Organization (FAO) reported that its price index, which measures the most traded food commodities, averaged 121.4 points in August, down from 124.0 in July.
The July reading was 123.9, up from a two-year low in June.
The August result was the lowest since March 2021 and 24% below an all-time high set in March 2022 when Russia invaded Ukraine.
The agency said dairy, vegetable oils, meat, and grains fell despite FAO’s rice benchmark rising to a 15-year high after Indian export curbs.
Wheat prices decreased 0.7% from July due to northern hemisphere harvests, while maize (corn) fell for a seventh consecutive month to a near three-year low due to a record Brazilian crop and the impending U.S. harvest, FAO said.
FAO said that the agency’s rice index rose over 10% month-on-month after India banned Indica white rice exports in July, disrupting trade during restricted availabilities before new-crop harvests.
Concerns over the El Nino weather pattern’s influence on world output drove FAO’s sugar index up 1.3% month-on-month in August, 34% above the year-earlier level.
In August, vegetable oil prices fell 3.1%, and dairy prices fell 4%, the ninth consecutive month, due to plentiful supply in Oceania and slower Chinese imports.
The FAO estimated global grain output this year at 2.815 billion tonnes, down from 2.819 billion in a separate cereal supply and demand assessment.
FAO stated that the current prediction was up 0.9% from 2022, equaling 2021’s record production. FAO reduced wheat production due to dry weather in Canada and the EU and excessive rain in China.
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