On July 8, the Food and Agriculture Organization of the United Nations (FAO) released its world Food Price Index and reported that June 2022 values averaged 154.23 points. , 2.3% lower than May and the third consecutive monthly decline from the all-time high in March, but still 29.0 points (21.1%) above the level a year ago. The June decline reflected lower international prices for vegetable oils, grains, and sugar, while dairy and meat prices increased.

The FAO Food Price Index for cereal, vegetable oil, dairy and meat is as follows:

The Cereal Price Index averaged 166.3 points, down 7.2 points (4.1%) from May but  36.0 points (27.6%) higher than the June 2021 value. After reaching near all-time highs in May, international wheat prices fell 5.7% in June, but were still 48.5% higher than a year earlier. The price decline in June reflected higher seasonal supplies following the Northern Hemisphere harvest, improved growing conditions in Canada and other major producing countries, an expected higher harvest in Russia, and a slowdown in world import demand. Coarse grain prices were also 18.4% higher than a year earlier while down 4.1% in June. Maize prices fell 3.5% in June as seasonal supply increases from Argentina and Brazil, where harvests are in progress, and improved production conditions in the U.S. put downward pressure on prices. Concerns about demand trends due to signs of economic recession also added to the downward price trend. Limited supply against strong demand for indica and basmati rice drove rice prices higher in June.

The Vegetable Oil Price Index dropped 17.4 points (7.6%) from the previous month to 211.8 points, reflecting lower prices for palm oil, sunflower oil, soybean oil, and rapeseed oil. Palm oil prices fell for the third consecutive month due to increased supply from major producing countries and expected higher exports from Indonesia, which holds domestic inventories. Meanwhile, sunflower and soybean oil prices also fell due to sluggish global demand in response to sharp price increases in recent months. As for rapeseed oil prices, the pressure on international prices has also weakened as new harvests add to supply.

The Dairy Price Index rose 5.9 points (4.1%) in June, hitting a high of 29.9 points (24.9%) in June of the previous year. The price increase was driven by concerns about falling supplies due to an early summer heat wave in Europe. 

The Meat Price Index rose 2.1 points (1.7%) from May to 124.7 points, 14 points (12.7%) higher than last June. In particular, chicken prices reached an all-time high due to global supply conditions caused by the war in Ukraine and the outbreaks of Avian Influenza in the Northern Hemisphere.

Russia's invasion of Ukraine has shaken the world's food security. To avert a world food crisis, international organizations such as the FAO and the international community, including the Japanese government, are working to promote exports of Ukrainian grain.

Contributor: IIYAMA Miyuki (Director, Information Program)