Food Prices Dropped In July, But Low Costs May Not Last
If you’ve noticed some food prices dropping at the grocery store, you’re not imagining things. According to the United Nations Food and Agriculture Organization (FAO), there was a drop in costs for high-demand foodstuffs in July as compared to the previous month.
The FAO is a tool used to track monthly changes in pricing for food commodities across the globe, and after months of rising costs, July presented some interesting data.
The biggest price drops in July were seen for vegetable oil and cereal. The FAO Vegetable Oil Price Index was down by 19.2%, representing the most significant reduction in 10 months. This is due to the fact that there have been global decreases in the costs of sunflower, palm, rapeseed and soy oils with more ample crops available.
The FAO Cereal Price Index was also down by 11.5% over June, largely because of the deal between Ukraine and Russia to allow the former to reopen their channels for grain exports, alleviating the issues with global wheat production.
Other significant reductions were seen in the price indices for dairy (down 2.5%), sugar (down 3.8%) and meat (a meager reduction of 0.5%) as compared to previous figures in June. However, experts warn that these decreased prices may not last.
“Many uncertainties remain, including high fertilizer prices that can impact future production prospects and farmers’ livelihoods, a bleak global economic outlook, and currency movements, all of which pose serious strains for global food security,” said FAO chief economist Maximo Torero in a statement accompanying the new report.
In fact, even though the FAO Food Index costs are down in July 2022, they’re still well above the figures in 2021 — in total, 13.1% higher. In the case of cereal alone, the index in July 2022 is 16.6% higher than the same time period the year prior. Per CNBC, experts worry that the “shaky” deal between Russia and Ukraine may falter, again impacting global wheat supply.
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