Global Food Prices Fall for 6 Consecutive Months... Vegetable Oils, Sugar, Dairy, and Meat Prices Decline

On the 27th of last month, a vegetable sales stand at a large supermarket in downtown Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Kim Daehyun] Global food prices, which surged due to Russia's invasion of Ukraine, have fallen for six consecutive months.

On the 7th (local time), the United Nations Food and Agriculture Organization (FAO) announced that the global food price index for last month recorded 136.3, down 1.1% from the previous month. However, it remains 5.5% higher compared to the same period last year, indicating that it has not yet recovered to pre-war levels.

The global food price index rose to a record high of 159.7 in March following Russia's invasion of Ukraine in February. However, it has continued to decline, recording 158.4 in April, 158.1 in May, 154.7 in June, 140.7 in July, and 137.9 (revised from 138.0) in August.

In particular, the price of vegetable oils dropped sharply by 6.6% compared to the previous month, leading the overall decline in food prices. Increased supply and falling crude oil prices contributed to the decrease in vegetable oil prices. Sugar, dairy products, and meat prices all fell by less than 1%, acting as downward factors for the global food price index.

The grain price index rose 1.5% compared to the previous month. This was influenced by a 2.2% increase in wheat prices due to heightened war tensions, including Russia's military mobilization order and the signing of the annexation of four occupied territories in Ukraine, which increased uncertainty in Ukraine's grain supply and demand. Rice prices also rose 2.2% month-on-month due to the recent impact of major floods in Pakistan.

The FAO has revised its global grain production forecast for this year downward from 2.744 billion tons to 2.768 billion tons, a 1.7% decrease compared to the previous year.

Since 1996, the FAO has monitored international price trends for 24 items and compiles and publishes monthly food price indices by five commodity groups: grains, oils, meat, dairy products, and sugar.

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