Global food prices have reached the highest level in the last 3.5 years due to supply chain disruptions caused by geopolitical risks and rising temperatures.
The Food and Agriculture Organization of the United Nations (FAO) announced the July data of the FAO Food Price Index, which monitors the monthly changes in international food prices.
Accordingly, the global food price index increased by 0.6 percent on a monthly basis to 131.1 points in July. Although the increases in grain, sugar and vegetable oil prices were balanced by the partial decline in meat and dairy product prices, global food prices reached the highest level since January 2023 with 131.1 points in July.
On the other hand, food prices remain 18.2 percent below the all-time high seen in March 2022.
Grain Price Index reached 113.8 points in July, with an increase of 3.4 percent compared to the previous month and 6.9 percent on an annual basis. Global wheat prices increased by 5.8 percent on a monthly basis and 9.9 percent on an annual basis. Increasing supply concerns due to ongoing disruptions in the export flow in the Black Sea and damage to the export structure triggered the rise in prices.
Global corn prices increased by 3.6 percent on a monthly basis in July, due to the hot and dry weather conditions in some parts of the USA and the increase in energy prices.
The Vegetable Oil Index increased by 3.7 percent on a monthly basis to 195.7 points, reaching the highest level since June 2022. The ongoing increase in palm and soybean oil prices is causing global vegetable oil prices to remain high.
Sugar Price Index increased by 5.6 percent compared to the previous month in July and reached 95 points, but prices remained 8 percent lower than in the same period last year. The rise on a monthly basis stemmed from concerns about the possible effects of long-term hot and dry weather on crop yields in the European Union and that El Nino conditions may have an impact on production expectations in major producing countries in Asia.
While the Meat Price Index decreased by 2.8 percent on a monthly basis to 127.7 points in July, it increased by 0.8 percent on an annual basis. The drop in July was the first monthly drop in meat prices this year.
Milk Price Index decreased by 0.8 percent compared to the previous month and 24.8 percent on an annual basis in July, reaching 116.2 points. The downward trend in milk prices seen since April continued in July.
