World Food Price Index Falls for 5th Month in August

World Food Price Index Falls for 5th Month in August
Grains of wheat in Vieillevigne near Nantes, France, on Aug. 24, 2021. (Stephane Mahe/Reuters)

PARIS—The United Nations food agency's world price index fell for a fifth month in a row in August, further from all-time highs hit earlier this year, as a resumption of grain exports from Ukrainian ports contributed to improved supply prospects.

The Food and Agriculture Organization (FAO) said on Friday that its price index, which tracks the most globally traded food commodities, averaged 138.0 points last month versus a revised 140.7 for July.

The July figure was previously put at 140.9.

The index has fallen from a record of 159.7 in March, hit after Russia's invasion of Ukraine. The August reading was, however, 7.9 percent higher than a year earlier.

FAO's cereal price index fell 1.4 percent month-on-month in August, with the re-opening of Ukrainian Black Sea ports under a diplomatic deal as well as favorable wheat harvest prospects in North America and Russia weighing on prices, the agency said.

But the maize price index rose 1.5 percent last month as hot, dry weather reduced the outlook for production in Europe and the United States, it said.

The vegetable oil, sugar, dairy, and meat price indices all fell, partly reflecting improved supplies.

In separate cereal supply and demand estimates, FAO lowered its forecast for global cereal production in 2022 to 2.774 billion tonnes from a previous projection of 2.792 billion in early July.

That is 1.4 percent below estimated output for 2021.

The cut to its prediction for 2022 cereal production was due to the weather-reduced corn prospects in the northern hemisphere, with European Union yields notably seen falling 16 percent below their five-year average, FAO said.

World cereal use in 2022/23 is expected to surpass production at 2.792 million tonnes, leading to a projected 2.1 percent fall in global stocks compared with 2021/22 to 845 million tonnes.

That would represent a stocks-to-use ratio of 29.5 percent, down from 30.9 percent in 2021/22 but still relatively high historically, FAO said.