World food prices increased in July, led by vegetable oils, dairy products, and sugar, the food agency of the United Nations said today.
This is a continuing trend in recovery from the previous month following steep declines caused by the coronavirus pandemic.
The food price index of the Food and Agriculture Organization (FAO), which calculates monthly fluctuations for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 94.2 points in July compared to a marginally revised June figure of 93.1.
“Similar to June, further increases in the prices of vegetable oils, dairy products and sugar outweighed lower prices in the meat markets amid the cereal price index ‘s overall steady value,” the FAO said in a statement.
The vegetable oil price index of the agency climbed 7.6% in July touching a five-month high.
Palm oil was boosted by anticipated slowdowns in production, revived global demand and sustained shortages of migrant labor, while soy oil prices were underpinned by tightening supply in Brazil. Fresh demand in Europe helped increase the price of rapeseed, it said.
Lock-down measures to combat the novel coronavirus dampened restaurant and biofuel demand and this curbed the market for vegetable oil earlier in the year.
In the case of dairy, all items monitored by the FAO rose, helping to lift the dairy price index by 3.5% last month while also helping it to climb back above the pre-pandemic rate, the agency said.
Owing to strong import demand from Asian buyers, milk powder prices increased. Butter and cheese were backed by strong demand for imports but remained below pre-pandemic rates, FAO said.
Average sugar prices rose 1.4%, helped by rising energy prices and drought-reduced production in Thailand.
Conversely, the FAO meat index dropped 1.8% and was 9.2% below the previous year’s pace, as global import demand continued to lag behind supply following corona virus-linked slaughter disruptions.
The cereal index was almost unchanged, with strong rises for maize (corn) and sorghum along with stable wheat prices.