The Food Price Index, which tracks changes in a basket of food commodities on the international market, rose to 131.1 points in July. This is higher than June’s reading of 130.3 points and marks the highest level since January 2023, according to FAO data.
The FAO’s chief economist told Reuters that the world is facing a new wave of food inflation. This is due to the wars in Iran and Ukraine, as well as the El Niño phenomenon, which contributes to rising prices and lower crop yields.
The July price increase was driven by a 3.4% rise in the cereal price index compared to the previous month. Wheat prices rose particularly sharply—by 5.8%. This was due to concerns about disruptions to exports from the Black Sea and damage caused by heat waves in key agricultural regions.
The vegetable oil price index rose by 2%, reaching its highest level since June 2022. Rising crude oil prices, driven by the escalation of the conflict with Iran, and strong demand for biodiesel supported prices for palm and soybean oils. However, prices for rapeseed and sunflower oils declined.
Sugar prices rose by 5.6% due to concerns about adverse weather conditions in Europe and Asia, as well as growing demand for ethanol in Brazil. At the same time, meat prices fell by 2.8% compared with their record high in June.
Prices for poultry, pork, and beef fell, although lamb prices reached a historic high due to a shortage of export supplies from Oceania. Prices for dairy products fell by 0.7%.
The overall food price index for July slightly exceeded the previous three-year highs recorded in April. However, these figures were 18.2% below the record high reached in March 2022 following the start of Russia’s military operation in Ukraine.
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