The FAO Food Price Index, a barometer of prices for food commodities, shot to a record high as soon as Russia invaded Ukraine and disrupted food supply chains. Now it is down for the third month in a row, with large global harvests at hand, but Ukraine is a new entrant on the list of nations needing food aid, said the UN agency.
Prices for grains, sugar, and vegetable oils all decreased in June, which together caused the index to drop to a value of 154.2 points, 5.5 points below its peak in March. The index was still 23% higher than it was a year ago despite the relatively minor fall.
“The factors that drove global prices high in the first place are still in play,” said FAO chief economist Maximo Torero Cullen, “especially a strong global demand, adverse weather in some major countries, high production and transportation costs, and supply chain disruptions due to Covid-19, compounded by the uncertainties stemming from the ongoing war in Ukraine.”
The Food and Agriculture Organization released three studies on Friday, one each stating that the world grain harvest would be slightly greater than anticipated and that 46 nations still required food aid. Ukraine and Sri Lanka have been added to this list, according to the FAO’s quarterly Crop Prospects and Food Situation report.
The FAO Food Price Index reported that while prices for grains, sugar, and vegetable oils decreased, prices for meat rose to an all-time high. According to the report, “world prices across all meat kinds climbed, with those of poultry meat climbing substantially and hitting an all-time high, reinforced by the persistent shortages in the world market caused by the conflict in Ukraine and avian influenza outbreaks in the northern hemisphere.”
June saw a 5.7% decline in global wheat prices as the northern hemisphere’s summer harvest got underway.
According to the FAO, reduced prices for palm, sunflower, soy, and rapeseed oils were the primary cause of the 7.6 percent drop in vegetable oil prices. In response to rising pricing, there has been a decline in global demand for the oils.