July Global Food Index Down 8.6% from Previous Month... Largest Drop in Nearly 14 Years

[Asia Economy Sejong=Reporter Son Seon-hee] Last month, the global food price index fell by the largest margin in about 14 years. This was due to the significant drop in international wheat prices following the agreement to lift the blockade of Black Sea ports between Ukraine and Russia.

According to the Ministry of Agriculture, Food and Rural Affairs on the 6th, the July global food price index announced by the United Nations Food and Agriculture Organization (FAO) was 140.9 (2014?2016 average=100), down 8.6% from the previous month (154.3). Prices of all five commodity groups (grains, oils, meat, dairy, sugar) fell, marking the largest decline since October 2008. In particular, grain and oils prices dropped sharply.

The global food price index had continuously risen from January (135.6), February (141.1), to March (159.7) this year, but after the upward trend stalled in April (158.4), it declined for four consecutive months from May (157.9), June (154.3), to July (140.9).

The grain price index in July recorded 147.3, down 11.5% from the previous month (166.3). International wheat prices fell significantly due to the agreement to lift the Black Sea port blockade between Ukraine and Russia and the progress of harvests in the Northern Hemisphere, leading the overall decline in grain prices. Corn prices also dropped due to the Russia-Ukraine agreement and harvest progress, and rice prices fell influenced by exchange rate fluctuations in major exporting countries.

The oils price index recorded 171.1 in July, down 19.2% from the previous month (211.8). Palm oil prices fell as Indonesia, the largest exporter, is expected to have sufficient export capacity.

The meat price index was 124.0 in July, down 0.5% from the previous month (124.6). Beef prices declined as export capacity from major producing countries increased relative to demand, and pork prices also fell due to generally weak import demand. In contrast, poultry prices rose to an all-time high due to avian influenza in the Northern Hemisphere.

The dairy price index recorded 146.4 in July, down 2.5% from the previous month (150.2). Sugar also fell to 112.8 points, down 3.8% from the previous month (117.3).

The Ministry of Agriculture, Food and Rural Affairs forecasted, "International grain prices have shown relative stability since June, and prices are expected to decline in the second half of the year compared to the first half." It added, "The domestic related industries (flour milling, feed, starch and sugar, soybean processing) hold inventory sufficient for usage through October to November this year," and "According to the industry, there are no significant short-term supply and demand issues."

Furthermore, the ministry stated, "We will closely communicate with the industry to monitor market conditions and cooperate with related ministries to implement measures for price management."

This content was produced with the assistance of AI translation services.