Food price index fell for the sixth month

The food price index of the United Nations Food and Agriculture Organization (FAO) fell for the sixth month in a row last September, falling from an all-time high hit earlier this year in the wake of the Russian war on Ukraine.

The FAO said, Friday, that its index – which tracks the prices of the most traded food commodities in the world – averaged 136.3 points last month, compared to 137.9 points last August.

The index fell from a record high of 159.7 points last March. However, the September reading remains 5.5% higher than a year ago.

The recent decrease is attributed to:

  • A decline in vegetable oil prices, by 6.6% on a monthly basis.
  • Increased supplies and lower oil prices. Prices of sugar, dairy and meat products fell by less than one percentage point, easing inflationary pressures.

By contrast, the FAO Cereal Price Index rose 1.5 percent month-on-month in September, with wheat prices increasing by 2.2 percent due to concerns about drought conditions in Argentina and the United States, strong EU exports, and increased uncertainty surrounding the use of Ukrainian ports in the Black Sea. Rice prices also rose 2.2%, partly due to concerns about the impact of the recent massive floods that swept Pakistan.

In separate estimates of cereal supply and demand, FAO lowered its forecast for world cereal production in 2022 to 2.768 billion tons, from 2.774 billion previously.

This organization expects a slowdown in global grain trade, with a decrease of 2.4 percent for the 2022/2023 campaign compared to the previous campaign, as a result of the repercussions of the war in Ukraine. With regard to the global stock of cereals at the end of the seasons of 2023, it is expected – according to the organization – to witness a contraction of 1.6 percent.

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