The FAO’s overall food price index declined slightly in June this year for the third month in a row, the Food and Agriculture Organisation of the United Nations (FAO) has reported.
The index, which tracks changes in the prices of a common basket of foods, averaged 154.2 points last month which marked a 3% drop on May. Despite this, when compared to the same month in 2021, the index was 23.1% higher this year.
The drop in June reflected declines in the international prices of vegetable oils, cereals and sugar, while dairy and meat prices increased.
Cereal price index
While international wheat prices fell by 4.1% in June compared to the previous month, they still remained 48.5% higher than their values a year ago.
The FAO’s cereal price index stood at 166.3 points in June, which reflected seasonal availability of cereals from harvests in the northern hemisphere, improved crop conditions in high producing countries and higher production prospects within Russia.
International coarse grain prices and world maize prices also fell within the month by 4.1% and 3.5% respectively, which was largely due to increased availabilities in Argentina, Brazil and the US.
Meat price index
While the cereal, vegetable oil and sugar price indices all fell month on month, the FAO’s meat price index marked a record high by rising to 124.7 points in June.
Jumping by 1.7% jump from May’s figure and 12.7% on the value from June 2021, this trend is representative of tight global supply conditions due to the war in Ukraine and a number of avian influenza outbreaks.
Dairy price index
As international prices of all dairy products increased in June, so too did the overall dairy price index. It rose by 4.1% to 149.8 points.
The FAO has stated that within the month, cheese prices rose the most, which was largely driven by a surge in import demand for spot supplies due to concerns over market availability later in the year.
Strong increases were also noted in world milk powder prices due to strong import demand and persistent global supply tightness.
Cereal production forecast
The FAO’s cereal supply and demand brief estimates that global cereal production in July will be 2.8 billion tonnes.
Although this will represent an increase of 7 million tonnes on the previous month, it is still 0.6% or 16.7 million tonnes short of the world output in 2021.
The FAO’s Global Information and Early Warning System (GIEWS) has estimated that more than 45 countries are in need of external assistance for food. This includes 33 in Africa, 10 in Asia, two in Latin America and the Caribbean and one in Europe.
More than 45 countries are in need of external assistance for food according to the FAO. This includes 33 in Africa, 10 in Asia, two in Latin America and the Caribbean and one in Europe.
The organisation forecasts that cereal production of these ‘Low Income Food Deficit Countries’ will be approximately 187.8 million tonnes, which is a marginal increase compared on 2021’s figure.