Main fall in world meals costs for July, however future provide worries stay

The UN company has printed its newest eagerly awaited Meals Value 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 index averaged 140.9 factors in July, almost 9 factors down from June. The decline was led by double-digit proportion drops in the price of vegetable oils but additionally cereals, with the latest 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,” stated Maximo Torero, FAO Chief Economist. 

“Nevertheless, many uncertainties stay, together with excessive fertilizer costs that may impression future manufacturing prospects and farmers’ livelihoods, a bleak world financial outlook, and foreign money actions, all of which pose critical strains for world meals safety.”  

In July, FAO’s Vegetable Value 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 stated, with palm oil costs declining because of prospects of ample export availability out of Indonesia, for instance.   

Moreover, sunflower oil costs additionally dropped markedly amid subdued world 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 Value 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 stated, 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 12 months. 

Candy information 

The Sugar Value Index fell by almost 4 per cent, amid issues over demand prospects because of expectations of an additional world financial slowdown, a weakening in Brazil’s foreign money, the actual, and decrease ethanol costs leading to higher sugar manufacturing there than beforehand anticipated.  

The downward development was additionally influenced by indications of higher exports and beneficial manufacturing prospects in India. In the meantime, the new and dry climate in European Union international locations additionally sparked issues over sugar beet yields and prevented sharper declines. 

FAO additional reported that the Dairy Value 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 steady, boosted by demand in European tourism locations. 

Combined image for meat 

Meat costs additionally continued the downward development, dropping by half a per cent from June because of weakening import calls for. Nevertheless, poultry costs reached an all-time excessive, boosted by agency import demand and tight provides because of Avian influenza outbreaks within the northern hemisphere. 

The FAO Meat Value Index was additionally down in July, by 0.5 p.c from June, because of weakening import demand for bovine, ovine and pig meats. Against this, worldwide poultry meat costs reached an all-time excessive, underpinned by agency world import demand and tight provides because of Avian influenza outbreaks within the northern hemisphere.  

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