Rabat – The Food and Agriculture Organization reported on Friday that July’s food price index dropped 8.6% compared to the previous month to settle at 140.9 points. Still, the July index remains 16.4 points or 13.1% higher compared to the same period in 2021.
The July decline is led by a significant month-on-month drop in vegetable oil and cereal indices estimated at 19.2% and 11.5%. Meanwhile, sugar, dairy, and meat indices have continued to fall over the past month at lower rates. The indices shrank by 3.8%, 2.5%, and 0.5%, respectively, compared to June.
As the vegetable oil index recorded the lowest drop among food commodities, the index marked a 10-month low of 171.1 points in July which was led by a fall in world prices for palm, soy, rapeseed, and sunflower oil resulting from lower crude oil prices and increased supply of the commodities.
Besides vegetable oil, cereal products experienced the second-largest drop in index points to reach an average of 147.3 points in July. The decline was notably led by lower wheat and maize prices which influenced the downwarding of sorghum and barley prices by 12.8% and 12.6%, the FAO indicated. Rice prices also declined for the first time this year in July, due to “inconsistent demand and currency movements in major exporters.”
The recent multilateral deal between the UN, Russia, Ukraine, and Turkey to safeguard some of Ukraine’s vital exports has significantly contributed to the drop in wheat (14.5%) and maize prices, contributing alone to a 10.7% fall in world maize prices. Seasonal harvests of wheat in the northern hemisphere and of maize in Argentina and Brazil further supported the downward trend.
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As wheat prices gradually recovered, the sugar price index reached a five-month low and a third consecutive monthly decline in July. The decline was triggered by the weakening of the Brazilian Real against the US Dollar, and a forecasted increase in Indian exports for the coming season.
Dairy prices, for their part, slightly dropped last month with skimmed milk powder seeing the largest decline, followed by butter and whole milk powder. Meanwhile, cheese prices remained stable thanks to a surge in European sales in tourist destinations which offset weak import demand.
As for the meat market, it recorded its first month-on-month decline after six consecutive months.
The change was led by an increase in Australian meat exports despite low import demand. Breaking down the decline in the meat price index, global bovine meat prices fell last month due to a surge in supply accompanied by low demand. In contrast, the strong global demand for poultry meat pushed for an all-time high price amid limited global supplies that have recently eased thanks to Ukrainian exports.
