Global food prices see steepest decline in nearly 14 years

Global food prices fell for the fourth consecutive month this July, with last month’s drop marking the steepest decline since October 2008, the UN’s Food and Agriculture Organization (FAO) said on Friday.

The FAO food price index dropped 8.6% month-on-month to 140.9 in July, led by a significant decrease in prices of cereal and vegetable oil.

However, the figure was 13.1% higher than a year ago.

The index measures monthly changes in international prices of five major food commodity groups – cereal, meat, dairy products, vegetable oils and sugar.

Maximo Torero, chief economist for the FAO, hailed the drop in food prices, but warned of persisting risks.

“Many uncertainties remain, including high fertilizer prices that can impact future production prospects and farmers’ livelihoods, a bleak global economic outlook, and currency movements, all of which pose serious strains for global food security,” he said.

The cereal price index dove 11.5% from June, led by wheat prices that have reduced thanks to a deal sealed between Türkiye, the UN, Russia, and Ukraine to resume Ukraine’s Black Sea grain exports.

The vegetable oil price index plummeted 19.2% in July from a month ago, marking a 10-month low.

The FAO sugar price index fell 3.8% from June, amid concerns over demand prospects due to expectations of a further global economic slowdown, a weakening Brazilian real, and lower ethanol prices.

The FAO dairy price index decreased 2.5% month-on-month, reflecting lackluster trading activity in Europe due to the summer holidays.

The meat price index slipped 0.5% from June, the first monthly decline after six months, due to weakening import demand for bovine, ovine and pig meat.