World food prices continue to fall in June

World food prices continued to fall in June for the third consecutive month, with a first decline in wheat prices, the United Nations Food and Agriculture Organization (FAO) announced on Friday.

After breaking a record in March following the invasion of Ukraine, the FAO Food Price Index, which tracks the monthly change in international prices of a basket of commodities, continues to decline slightly by 2.3%, most of the indices (cereals, vegetable oils, sugar) marking a drop.

It stands at 154.2 points, up 23.1% over one year compared to June 2021, underlines the organization.

“Although the FAO Food Price Index fell in June for the third consecutive month, it remains close to the all-time high reached in March this year”notes the chief economist of the FAO, Máximo Torero Cullen.

The FAO Cereal Price Index fell 4.1% in June, with international wheat prices contracting for the first time since March’s record high (-5.7%). A decline that can be explained in particular by ” seasonal availability of new crops in the Northern Hemisphere, improved growing conditions in some major producing countries (such as Canada) and higher production prospects in the Russian Federation“.

Russia’s harvest, which together with Ukraine represents almost a quarter of the world’s wheat supply, is indeed set to be exceptional, and could potentially allow it to export up to 40 million tonnes in 2022-23. .

The FAO vegetable oil index fell 7.6% at the same time, with lower prices for sunflower, soybean or palm oil, which are subject to a seasonal increase in production and greater availability in Indonesia.

Despite this general decline, “the factors that drove world prices up in the first place continue to weigh,” warns Cullen. In addition to the war in Ukraine, there is strong global demand, and heavy disruptions in supply chains linked to the continuation of the Covid-19 epidemic.

Contrary to this downward movement, the FAO meat price index climbed 1.7% in June, and “thus reached a new record”. “World prices for all types of meat have increased, especially those for poultry (…) due to the continuing tightness of global supplies due to the war in Ukraine and the appearance of outbreaks of avian flu in the northern hemisphere. “says the FAO.

The organization slightly raised its forecast for world cereal production in 2022: it would approach 2.8 billion tonnes with an additional 7 million tonnes. “At this level, global production would still be 0.6% lower than in 2021,” she points out.

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