Global food prices decline but remain near all-time highs

Rome, Italy | Xinhua | Global food prices slipped for the sixth consecutive month in September, as lower demand and strong production levels helped balance the impacts of higher energy and transportation costs, the United Nations Food and Agriculture Organization (FAO) reported Friday.

The monthly FAO Food Price Index, averaging 136.3 points, was down 1.1 percent compared to August. This was the sixth consecutive month the index declined since it surged to its highest level in March, after the conflict between Russia and Ukraine sent energy prices soaring and interrupted trade routes.

Despite the decline, the broad index — which tracks changes in global prices for common food commodities — remained higher than at the start of the year and, in real terms, higher than at any point previous to 2022 since the 1970s.

Prices for grains and cereals, a component in the index, rose by 2.2 percent due in part to uncertainty connected to the supply of wheat through the Black Sea, the trade route most affected by the Ukraine crisis. Dry conditions in the United States and Argentina have also had an impact on production in those countries, with rice prices also climbing based in part on changes in export policies from India.

In a separate report also released Friday, FAO estimated that global cereal production this year would be 2.768 billion tonnes, down 1.7 percent from 2021.

The increase in prices for grains and cereals was offset by a big drop in vegetable oil prices, which fell 6.6 percent to its lowest level since February 2021. The FAO said that rising production from Southeast Asia was a factor in the decline.

Other major components in the broad index declined, but only marginally.

Dairy prices were down by 0.6 percent, though they remained more than 20 percent above levels from a year ago, FAO said. Meat prices were down by 0.5 percent while sugar prices fell by 0.7 percent.