An index of food-commodity costs fell 2.1% last month on subdued demand and good output of vegetable oils and milk, the United Nations’ Food and Agriculture Organization said Friday. The gauge has slid 24% since hitting a record in March 2022, when Russia’s invasion of Ukraine disrupted grain exports.
Grains have been a big driver of the retreat since last year. A second bumper Russian wheat harvest has helped temper prices, and Ukrainian exports continue to flow despite the end of a Black Sea grain deal and repeated attacks on its ports. The US is also forecast to collect a near-record corn crop, although extreme heat at the end of the growing season risks curbing yields.
There are also other supply threats. India has slapped export restrictions on rice, a vital part of the diets of billions around the world, sending the FAO’s rice index to a 15-year nominal high last month.
Extreme weather is affecting a variety of crops and food inflation also remains high in many countries on the back of high energy and labor costs. The UN’s food price index reflects costs for internationally-traded commodities and not retail prices. Dairy, vegetable oil and meat prices all dropped at least 3% last month, the FAO said. Its gauge of grain costs also declined, pressured by a record Brazilian corn harvest. Sugar prices rose.
