Global food prices hit 3.5-year high in July

Global food prices rose to their highest level in three-and-a-half years in July, driven by supply chain disruptions linked to geopolitical risks and increasingly hot and dry weather conditions, UN data showed Friday.

The UN Food and Agriculture Organization's (FAO) Food Price Index increased 0.6% from the previous month to 131.1 points in July, its highest level since January 2023.

Increases in cereal, sugar and vegetable oil prices outweighed declines in meat and dairy prices.

Despite the latest rise, global food prices remained 18.2% below the all-time high recorded in March 2022.

The FAO Cereal Price Index climbed 3.4% month-on-month and 6.9% year-on-year to 113.8 points.

Global wheat prices rose 5.8% from June and 9.9% from a year earlier, as continued disruptions to export flows in the Black Sea and damage to export infrastructure heightened supply concerns.

The Vegetable Oil Price Index rose 3.7% to 195.7 points, reaching its highest level since June 2022, as palm and soybean oil prices remained elevated.

The Sugar Price Index increased 5.6% from the previous month to 95 points, though it was still 8% lower than a year earlier.

The monthly rise reflected concerns over the impact of prolonged hot and dry weather on crop yields in the EU and the potential effect of El Nino conditions on production prospects in major Asian producing countries.

Meanwhile, the Meat Price Index fell 2.8% month-on-month to 127.7 points, marking its first monthly decline this year, while remaining 0.8% higher than a year earlier.

The Dairy Price Index declined 0.8% from June and 24.8% year-on-year to 116.2 points, extending the downward trend seen since April.