Global food prices rose in July to their highest level in three years, driven by adverse weather conditions and escalating military conflicts in the Persian Gulf and Black Sea regions, which have contributed to the rising costs of agricultural products. This was reported by Reuters, citing the Food and Agriculture Organization (FAO) of the United Nations.
The organization's chief economist told Reuters that the world is facing a new wave of food inflation. He noted that the crises in Iran and Ukraine, along with the El Niño climate phenomenon, are creating a "perfect storm" that leads to rising prices and declining yields.
The FAO food price index, which tracks monthly changes in the value of a basket of food products sold on the international market, averaged 131.1 points in July, up from 130.3 points in June. According to Reuters, this is the highest figure since January 2023.
In July, the FAO index for cereal prices increased by 3.4% compared to the previous month, primarily driven by a 5.8% rise in wheat prices.
According to FAO, concerns about potential disruptions to exports via the Black Sea and damage to crops in major producing regions due to hot weather have affected the wheat market.
The vegetable oils price index rose by 2%, reaching its highest level since June 2022.
Reuters notes that the rise in oil prices due to the escalation of conflict around Iran and high demand for biodiesel have contributed to the increase in palm and soybean oil prices. At the same time, prices for canola and sunflower oils have decreased.
Sugar prices rose by 5.6% due to concerns about weather conditions in Europe and Asia, as well as expectations of higher demand for ethanol in Brazil.
Meanwhile, according to FAO, meat prices decreased by 2.8% compared to record levels recorded in June. Prices for chicken, pork, and beef have decreased, while lamb prices have reached a historical high due to limited export volumes from Oceania.
Prices for dairy products also fell by 0.7%. Despite the recent increase, the organization's overall food price index remains 18.2% lower than the historical maximum recorded in March 2022, which was established after the onset of the conflict in Ukraine.
