Although It Fell Last Month, Up 0.5%
Sugar and Grain Price Index Declines
Global food prices showed an upward trend in June. Although the price index declined for some items, the prices of vegetable oils, meat, and dairy products increased.
According to the Ministry of Agriculture, Food and Rural Affairs on July 5, the United Nations Food and Agriculture Organization (FAO) reported that the global food price index for last month stood at 128.0, up 0.5% from the previous month. The index is calculated by comparing prices to the average from 2014 to 2016, which is set at 100. After falling to 127.3 in May, the index rose again in June.
On May 2, 2022, cooking oil and olive oil are displayed on the shelves of a large supermarket in Seoul. Photo by Kang Jinhyung
By category, the vegetable oil price index rose by 2.3% from the previous month to 155.7. Palm oil prices increased due to rising demand. Soybean oil prices climbed as expectations for higher demand for raw materials grew following Brazil and the United States’ announcements of support for the biofuel industry. Rapeseed oil prices rose as supply shortages were anticipated, while sunflower oil prices fell due to forecasts of increased production in the Black Sea region.
The meat price index also increased by 2.1% to 126.0. Beef prices rose as Australian beef became more expensive due to reduced exports from Brazil and increased demand in the United States. Pork prices remained strong due to higher demand. Lamb prices increased because of reduced exports from Oceania and greater international demand. Chicken prices fell as supply within the region increased after Brazil imposed export restrictions following the outbreak of highly pathogenic avian influenza (AI) in May.
The dairy price index rose by 0.5% to 154.4. Butter prices increased due to supply shortages in Oceania and the European Union (EU), as well as higher demand in Asia. Cheese prices also rose because of increased demand in East Asia. In contrast, the prices of skim milk powder and whole milk powder declined due to weak demand and increased supply.
The sugar price index fell by 5.2% to 103.7. In Brazil, sugar production exceeded expectations, leading to a drop in prices. Improved crop outlooks in India and Thailand also contributed to the decline in international prices.
The grain price index also fell by 1.5% to 107.4. Corn prices declined as supply increased in Argentina and Brazil, and rice prices dropped due to decreased demand for the Indica variety. Wheat prices, however, rose from the previous month due to weather concerns in parts of Russia, the European Union, and the United States.
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