FAO Food Price Index Continues to Rise
The FAO Food Price Index rose slightly in July by 1.2 percent. This increase, while marginal, marks the second consecutive monthly rise in food prices. Rising vegetable oil, dairy, and sugar prices drove the overall higher index.
The Cereals Price Index remained steady in July month-on-month and was only 0.4 percent higher than its July 2019 level. Within the index, however, there was variation from crop to crop. Despite a weakening U.S. dollar and concerns about production prospects in Europe, the Black Sea, and Argentina, wheat prices did not change in July thanks to slowing trade and forecasts of strong production in Australia. Maize prices, on the other hand, increased by 5.8 percent from June and by 10.4 percent from July 2019 due to recent large purchases from China, the weakening of the dollar, and concerns over weather in the U.S. Rice prices fell to a four-month low in July thanks to expectations of an ample 2020 harvest and slowing trade activity. The Vegetable Oils Price Index rose by 7.6 percent in July to reach a five-month high. Soyoil prices rose significantly in July due mostly to decreased supplies in Brazil. Rapeseed and palm oil prices also rose due to increased demand for biofuel and food use and slowdowns in production following localized flooding in producing countries, respectively. The Dairy and Sugar Indices also rose in July by 3.5 percent and 1.4 percent respectively. The Meat Price Index fell by 1.9 percent from June.