International Food Price Index Surges by 1.3% in July

Gilbert Ekugbe

The Food and Agriculture Organisation’s (FAO’s) food price index has revealed that international prices of globally-traded food commodities, averaged 123.9 points in July, which represented 1.3 per cent from the previous month.

In a statement obtained from its website, the FAO said that global food commodity prices increase was influenced by the termination of the Black Sea Grain Initiative and new trade restrictions on rice.

According to FAO, the increase was driven by a sharp jump in the FAO Vegetable Oil Price Index, which rose to 12.1 per cent from June after seven months of consecutive declines while international sunflower oil prices rebounded by more than 15 per cent in the month, due mostly to renewed uncertainties surrounding the exportable supplies after the Russian Federation’s decision to end implementation of the Black Sea Grain Initiative.

In the statement, world prices for palm, soy and rapeseed oils increased on concerns over output prospects in leading producing countries even as the FAO Cereal Price Index declined by 0.5 per cent from June, driven by a 4.8 per cent drop in international coarse grain quotations due to increased seasonal supplies of maize from ongoing harvests in Argentina and Brazil and potentially higher-than-anticipated production in the United States of America.

“However, international wheat prices rose by 1.6 per cent, their first monthly increase in nine months, due to uncertainty over exports from Ukraine as well as continued dry conditions in North America,” FAO said.

The FAO All Rice Price Index increased by 2.8 per cent on the month and 19.7 per cent on the year to reach its highest nominal level since September 2011, as India’s 20 July prohibition of non-parboiled India exports fostered expectations of greater sales in other origins, amplifying upward pressure already exerted on prices by seasonally tighter supplies and Asian purchases.

“This upward pressure of rice prices raises substantial food security concerns for a large swathe of the world population, especially those that are most poor and who dedicate a larger share of their incomes to purchase food,” FAO warned.