FAO: Global food prices declined in July for second consecutive month

The Food and Agricultural Organisation (FAO) says global food prices declined further for the second month in a row in July 2021.

FAO disclosed this in its latest food price index (FPI) report released on Thursday.

The report measures monthly change in international prices of five food commodity groups which are cereals, vegetable oil, dairy, meat, and sugar.

“The FAO Food Price Index (FFPI) averaged 123.0 points in July 2021, down 1.5 points (1.2 percent) from June but still 29.1 points (31.0 percent) higher than its level in the same period last year,” the report reads.

“The drop in July reflected declines in prices of cereals, dairy products and vegetable oils which more than offset increases in meat and sugar quotations for the second consecutive month.

“The FAO Cereal Price Index was 3.0 percent lower in July than in June, pushed down by a 6.0 percent month-on-month drop in international maize prices.

“Prices of other coarse grains such as barley and sorghum also dropped significantly, reflecting weaker import demand. However, wheat quotations edged 1.8 percent higher in July – reaching their highest level since mid-2014.

“At the same time, international rice prices hit two-year lows, impacted by currency movements and a slow pace of sales caused by high freight costs and logistical hurdles.

“The FAO Dairy Price Index declined 2.8 percent from June, with skim milk powder registering the largest drop, followed by butter, whole milk powder and cheese.

“The FAO Vegetable Oil Price Index reached a five-month low, declining 1.4 percent from June, as lower prices for soy, rape and sunflower seed oils more than offset rising palm oil values.”

The report added that sugar price index rose by 1.7 percent in July – fourth monthly increase; and meat prices also increased due to high importation of poultry meat, while pork (pig meat) fell due to decline in imports by China.

Meanwhile, the National Bureau of Statistics (NBS) said the composite food index continued to rise but at a slower rate to 21.83 percent in June from 22.28 percent, representing a third consecutive decline in food inflation rate.

NBS said the rise was due to increases in the price of bread and cereals, potatoes, yam and other tubers, milk, cheese and eggs, fish, soft drinks, vegetables, oils and fats and meat.

In a recent report by SBM Intelligence, it said Nigeria’s food prices surged 400 percent in 12 years, due to current sluggish economic growth and rising unemployment rate.