economy and politics

Food prices fell in August for the fifth consecutive month, reports the FAO

A field of wheat during harvest season in Krasne, Ukraine.

The food price index It fell for the fifth consecutive month and averaged 138 points in August, a 1.9% lower record compared to July, but well above -7.9%- the figure recorded a year ago, the United Nations reported this Friday. for Food and Agriculture (FAO).

The indicator reflects the monthly variation of the international prices of the basket of the most traded food products.

Thus, the prices of cereals decreased by 1.4% compared to the previous month, a decline driven by a 5.1% drop in international wheat prices. This decline was due to improved prospects for its production in North America and Russia, as well as the resumption of grain exports from Ukrainian ports on the Black Sea.

Average rice costs remained stable during the month of August, while the price of coarse grains grew slightly -0.2%- due to the increase in world maize prices, derived from hot and dry growing conditions in the European Union and the United States, although this rise was offset by the drop in the prices of barley and sorghum.

The price of vegetable oils fell by 3.3% compared to July, reaching a level slightly lower than that of August 2021. The world costs of soybean oil increased moderately due to fears of unfavorable atmospheric conditions for its production in USA; however, the rise was offset by lower quotations for palm, sunflower and rapeseed oils, as well as sunflower oil shipments from Ukrainian ports.

Dairy products reduced their cost by 2%, although they remain 23.5% above the value registered in August 2021. World cheese prices increased for the tenth consecutive month while those of milk decreased on expectations of an increase in New Zealand’s supply, despite lower dairy production in Western Europe and the United States.

The value of meat fell by 1.5% from July, although it is still 8.2% above the value registered twelve months ago, while sugar prices fell by 2.1% and reached their lowest level since July 2021, mainly due to the increase in the export limit in India and the fall in ethanol prices in Brazil.



FAO/Anatolii Stepanov

A field of wheat during harvest season in Krasne, Ukraine.

A significant decline in cereal production is forecast for 2022

FAO forecasts world cereal production to decline by 38.9 million tonnes, or 1.4 percent, from a year earlier, according to its new information note.

The downward revision is mostly due to coarse grains, as maize yields in the European Union are expected to fall 16% below their five-year average due to heat and dryness.

Instead, the agency raised its forecast for world wheat production from its last report in July to 777 million tons, a decrease that is considered “insignificant” compared to 2021, and achieved thanks to a level of harvests “ unprecedented” in Russia and favorable weather conditions in North America. World rice production is forecast to fall 2.1% from the all-time high reached in 2021.

World cereal consumption for 2022-23 is now put at 2,792 million tonnes, while its global stocks at the end of the 2023 season are projected to contract by 2.1% to 845 million tonnes. .

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