By contrast, FAO expects there will be a “negligible drop” in worldwide wheat production resulting from expected record harvests in Russia and conducive weather conditions in North America.
A landmark agreement to unblock Ukraine grain exports amid the ongoing war was signed in July by the country, Russia, Türkiye and the UN.
Ukraine exports a factor
? World food commodity prices dip for fifth month in a row in August (?1.9 % from July) but remain 7.9 % above their value a year before.
The price of meat declined by 1.5 per cent but remained just over eight per cent higher than the value last August.
FAO has also issued its global cereal production forecast for this year, which projects a decline of nearly 40 million tonnes, or 1.4 per cent from the previous year.
FAO said the decline in cereal prices reflected improved production prospects in North America and Russia, and the resumption of exports from Black Sea ports in Ukraine.
High price for cheese
Although dairy prices saw a two per cent drop, they remained 23.5 per cent higher than in August 2021. The price of cheese increased for the tenth consecutive month, though milk prices “eased” following expectations of increased supplies from New Zealand, even amid projections of lower production in Western Europe and the US.
Vegetable oil prices decreased by 3.3 per cent, which is slightly below the August 2021 level. FAO attributed this to increased availability of palm oil from Indonesia, due to lower export taxes, and the resumption of sunflower oil shipments from Ukraine.
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The bulk of this decline mainly concerns coarse grains, with maize yields in Europe expected to drop 16 per cent below their five-year average level due to the exceptional hot and dry weather conditions affecting the continent.
Outlook for cereals and wheat
Global cereal production to decline by 38.9 million tonnes (?1.4 %) in 2022 from the previous year.
Its latest Food Price Index shows that the prices of five commodities – cereals, vegetable oil, dairy, meat and sugar – were lower in August than in July.
Rice prices on average held steady during August, while quotations for coarse grains, such as maize, increased marginally.
Sugar prices also hit their lowest level since July 2021, largely due to high export caps in India and lower ethanol prices in Brazil.
