Global Food Prices Dip 2.1% in August: FAO Report

by Ella

In a recent report released by the Food and Agriculture Organization of the United Nations (FAO), global food commodity prices experienced a notable 2.1 percent decline in the month of August, with the FAO Food Price Index standing at 121.4 points, a drop from the previous month’s levels. The decline, as outlined in the FAO report, was chiefly driven by falling prices in essential food items, excluding rice and sugar.

The FAO Food Price Index, a barometer tracking the fluctuation in worldwide prices of internationally traded food products, has witnessed a significant 24 percent drop from its peak in March 2022.


This decline affected various food categories, with notable drops in price indices for dairy products, vegetable oils, meat, and cereals, while the sugar price index showed modest growth.


Vegetable Oils Witnessed a 3.1% Decrease


In August, the FAO Vegetable Oil Price Index experienced a 3.1 percent drop, with a reading of 125.8 points. This decline was primarily due to reduced global prices for palm, sunflower, soy, and rapeseed oils. Global sunflower oil prices took a particularly steep tumble, plummeting by nearly 8 percent. This was attributed to reduced demand for imports and an ample supply from major exporting nations. Similarly, soy and rapeseed oil prices fell due to improved soybean harvest conditions in the United States and abundant global supply, respectively.


Dairy and Meat Prices Show Declines

The Dairy Price Index decreased by 4 percent compared to July, with the surplus of whole milk powder from Oceania and a slowdown in imports by China cited as contributing factors. Skim milk powder prices also reached their lowest point since mid-2020 due to reduced import demand and sluggish market activity during European summer holidays.

Additionally, the FAO Meat Price Index witnessed a 3 percent decline from July and a 5.4 percent drop from the previous year. This decrease was primarily attributed to increased export availability, particularly in Australia, and weaker demand from China.

Cereals See a 0.7% Drop

Furthermore, the FAO Cereal Price Index experienced a 0.7 percent decline compared to July. International wheat prices took a more substantial hit, dropping by 3.8 percent in August amid higher seasonal availabilities from leading exporters. Global coarse grain prices also fell by 3.4 percent, influenced by abundant maize supplies from Brazil’s record harvest and the upcoming maize harvest in the United States.

Sugar Bucks the Trend with a 1.3% Increase

In contrast to the general trend, the Sugar Price Index saw a 1.3 percent increase compared to July and was 34.1 percent higher than its value from a year ago. This upward movement was driven by concerns regarding the impact of the El Niño phenomenon on sugarcane crops, alongside below-average rainfall and ongoing dry weather conditions in Thailand. Despite these challenges, factors such as the significant sugar crop harvested in Brazil, lower ethanol prices, and the depreciation of the Brazilian Real helped mitigate upward pressure on global sugar prices.

Rice Prices Surge to 15-Year High

In another noteworthy market development, the Rice Price Index surged by a significant 9.8 percent from July, reaching its highest level in 15 years. This surge was a consequence of disruptions in the rice trade following India’s ban on exporting Indica white rice. India, as the world’s largest rice-exporting country, had a substantial impact on global rice prices due to this policy change.



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