The Food and Agriculture Organization of the United Nations (FAO) reported on Friday (August 4th) that world food prices rose in July, as a result of the termination of the agreement. on the Black Sea Initiative and new trade restrictions on rice.
In a press release entitled « Rebound of the FAO Food Price Index in July », the UN agency points out that this index, which tracks the monthly evolution of the international prices of food products traded in the world, represents an increase of 1.3% compared to the previous month and a decline of 11.8% compared to July 2022.
This increase, she explains, stems from a sharp surge in the FAO Vegetable Oil Price Index, the level of which rose 12.1% from June after seven consecutive monthly declines. International sunflower oil prices rebounded by more than 15 percent, particularly as a result of renewed uncertainty over export availabilities following the Russian Federation’s decision to end implementation of the Black Sea Grain Initiative.
The FAO Cereal Price Index fell 0.5% from June. The drop could be explained by the 4.8% depreciation of international prices of coarse grains, which results from the seasonal increase in the supply of maize from the current harvests in Argentina and Brazil and the expected increase to a highest level of production in the United States of America. International wheat prices meanwhile climbed 1.6%, marking their first month-on-month rise in nine months, on the back of uncertainties over Ukrainian exports and persistent dry weather in North America.
The FAO Price Index for all types of rice jumped 2.8% in one month and 19.7% in one year, and reached its highest nominal level since September 2011. This was explained by the ban on Indian exports of non-parboiled Indica rice on June 20, which foreshadowed an increase in sales of rice from other origins and amplified the upward pressure already exerted on prices due to the seasonal tightening of supply and shopping from Asia.
According to the agency, this upward pressure on rice prices « raises significant concerns about the food security of a large part of the world’s population, especially the poorest people and those who spend a of their income to the purchase of foodstuffs ».
The FAO stresses that export restrictions could have negative effects on production, consumption and prices beyond their deadlines and could aggravate high food price inflation in the domestic markets of Many countries.
The FAO Sugar Price Index fell 3.9%, amid good progress in the sugar cane harvest in Brazil and improved rains in most growing areas in India, which weighed on world prices, as well as sluggish demand from Indonesia and China, which are the two largest sugar importers in the world.
Regarding dairy products, the FAO Price Index fell 0.4% in July and stood at a value 20.6% lower than in July 2022. International cheese prices rose slightly after having recently experienced a sharp drop due to the repercussions of hot weather on the seasonal decline in milk supply in Europe.
Finally, the FAO Meat Price Index fell 0.3% from its June level. Cattle, sheep and poultry meat prices declined due to ample availability and, in some cases, weaker demand from major importers. Conversely, pork prices rose due to strong seasonal demand combined with continued tight supplies from Western Europe and the United States of America.
By OMA Newsletter N° 1278 of 05/08/2023
Article published under the direction of Dr. Najib Kettani
The OMA, NGO with an Intercontinental vocation
For the development of cultural exchanges
Valuing human potential
The promotion and consolidation of Africa’s development, and
Inter-African integration
