By Alice Seeley
On Sept. 2, The Food and Agriculture Organization (FAO) announced that its World Food Price index, which measures the most globally traded food commodities, fell for the fifth month in a row in August. The organization stated that its index averaged 138.0 points for August versus 140.7 for July.
The index has been steadily decreasing from a record high of 159.7 in March and is currently at its lowest reading since January 2022. Despite this, the August reading is 7.9% higher than in August 2021.
The FAO said the reopening of Ukrainian Black Sea ports as part of a diplomatic agreement, as well as positive wheat harvest forecasts in North America and Russia, contributed to the 1.4% month-over-month decline of the price index.
The index showed that vegetable oils fell below their level a year ago, after a 3.3% decrease. The agency attributed this to the increased availability of palm oil from Indonesia due to lower export taxes and the resumption of sunflower oil shipments from Ukraine. The FAO cereals index fell by 1.4%, caused by a 5.1% decrease in international wheat prices. On average, rice prices stayed steady last month. In addition to the decrease, the FAO lowered its 2022 grain forecast by 1.4% as heat waves led to dying corn crops in the European Union.
While the falling food prices may help consumers a little, food inflation is not easing with higher energy costs increasing prices.
“Food prices are still really high,” stated Erin Collier, an economist at the UN’s Food and Agriculture Organization. “Our point of concern is the fact that cereals, which have been a main driver of these price increases, remain very high.”