- World
- Aug 08
- Sreesha V.M
World food prices hit 3-year high in July, says FAO
• World food prices rose in July to their highest in more than three years as adverse weather and war escalation in the Gulf and Black Sea supported crop markets, the Food and Agriculture Organisation of the United Nations (FAO) said on August 7.
• The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.
• It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.
• Recent heatwaves and energy price dynamics pushed up quotations for cereals, vegetable oils and sugar.
Key points of the FAO Food Price Index:
• The FAO Cereal Price Index increased by 3.4 per cent from June, reversing its May decline, to stand 6.9 per cent above its July 2025 level.
• Global wheat prices surged by 5.8 per cent amid heightened concerns over continued disruptions to Black Sea export flows and the likely impact of recent heatwaves on crop yields in several key producing countries.
• World maize prices increased by 3.6 per cent, supported by concerns over hot and dry weather in parts of the United States of America and spillover effects from firmer energy markets amid heightened geopolitical tensions.
• The FAO Vegetable Oil Price Index increased by 2 per cent from June, reaching its highest level since June 2022.
• The FAO Meat Price Index weakened by 2.8 per cent from its record high in June, posting its first monthly decline this year.
• The FAO Dairy Price Index declined by 0.7 per cent in July, with quotations for whole and skim milk powders dropping along with those for butter.
• Prices for internationally traded cheese rose for the first time in a year as tighter seasonal milk supplies in the European Union more than offset continuing price declines in Oceania and pressure from ample export supplies and intensified competition from the USA.
• The FAO Sugar Price Index increased by 5.6 per cent in July, erasing its June decline, due mainly to concerns about the potential impacts of persistent hot and dry weather on crop yields in the European Union and of El Nino-related weather conditions on production prospects in key producing countries in Asia.
• Expectations of stronger demand for ethanol in Brazil following a temporary increase in the mandatory ethanol blend in gasoline also provided support to prices, which however was partly mitigated by improving harvesting conditions in Brazil’s key Center-South growing regions.
(The author is a trainer for Civil Services aspirants.)