The termination of the Black Sea Grain Initiative has influenced a rise in global food commodity prices last month, the Food and Agriculture Organisation of the United Nations (FAO) has said.

The grain deal brokered by the UN and Turkey ended on July 17, following Russia’s decision to withdraw from the agreement which allowed for the export of Ukrainian grain via the black sea.

Notable jumps in wheat and vegetable oil quotations were partly offset by falling international maize and sugar prices last month, according to the FAO Food Price Index for July.

At 123.9 points, the index, which tracks monthly changes in the international prices of globally-traded food commodities, is now 1.3% higher than in June but remains 11.8% below its 2022 level.

FAO Food Price Index

The price index for vegetable oils increased sharply last month by 12.1% when compared to June 2023 after seven months of consecutive declines, the FAO said.

International sunflower oil prices rebounded by over 15% in July, which was mostly due to renewed uncertainties surrounding the exportable supplies after the ending of the grain deal.

International wheat prices rose by 1.6%, their first monthly increase in nine months, due to uncertainty over exports from Ukraine as well as continued dry conditions in North America.

A 4.8% decline in international coarse grain quotations due to higher seasonal supplies of maize from ongoing harvests in Argentina and Brazil drove a 0.5% drop in the cereal price index.

The dairy price index fell by 0.4% and is now 20.6% lower than in 2022. World cheese prices recovered slightly after hot weather affected seasonally declining milk supplies in Europe.

Quotations for cattle, sheep and poultry meat declined on solid supply availabilities and, in some cases, lower demand from leading importers. This led to a 0.3% drop in the July meat price index.

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Pig meat prices, by contrast, increased which reflects high seasonal demand coupled with ongoing tight supplies from western Europe and the US, the FAO said.

The FAO sugar price index declined by 3.9% as good progress in Brazil’s sugarcane harvest and improved rains across most growing areas in India weighed on world quotations, the FAO said.

The FAO all rice rice index increased by 2.8% in July when compared to the previous month, and by 19.7% on last year to reach its highest nominal level since September 2011.

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”, the FAO warned.