Global food prices rose for the third consecutive month in July, driven mainly by higher cereal, sugar and dairy quotations.
The FAO Food Price Index – a monthly trade-weighted index tracking international market prices of five major food commodity groups – averaged 179.1 points in July, its highest value since January 2015, marking a 2.3 percent increase from June 2017 and 10.2 percent rise from its level a year earlier.
The FAO Cereal Price Index was up 5.1 percent in July. The Index has been rising consistently over the past three months, supported by firmer wheat and rice quotations. Wheat values rose the most in July, as continued hot and dry weather conditions hampered spring wheat crops in North America, while seasonal tightness pushed up rice prices. On the other hand, maize prices remained largely steady.
The FAO Dairy Price Index gained 3.6 percent in July, underpinned by stronger prices of butter, cheese and Whole Milk Powder (WMP). Tighter export availabilities pushed butter prices to a new high in July, widening further the spread between butter quotations and other dairy products.
The FAO Sugar Price Index rose by 5.2 percent in July, marking the first monthly increase since the beginning of the year. The strong appreciation of the Brazilian real was the main driver behind this rebound in sugar values. Despite the latest increase, sugar prices remain well below (26 percent) the corresponding period last year.
The FAO Vegetable Oil Price Index fell 1.1 percent from June to its lowest level since August 2016. The July slide primarily reflected good production prospects for palm oil in Southeast Asia and weak global import demand.
The FAO Meat Price Index remained steady. An increase in international prices for ovine meat in July was offset by downward price movements in bovine, pig and poultry sectors.