On September 2, the Food and Agriculture Organization of the United Nations (FAO) released the global FAO Food Price Index (FFPI), showing that the August 2022 value averaged 138.0 points, 1.9% lower than in July and the fifth consecutive month of decline from the all-time high in March, but 10.1 points (7.9%) higher than a year ago. The index remained 10.1 points (7.9%) above its level one year ago. All five components of the FFPI fell slightly in August, ranging from 1.4% for grains to 3.3% for vegetable oils.

Cereal prices were 11.4% higher than last year, but down 1.4% from July. In particular, world wheat prices fell 5.1% in August, the third consecutive monthly decline, reflecting improved production prospects in Canada, the USA, and Russia, seasonal inventory recovery in the Northern Hemisphere, and the resumption of exports from Ukraine's Black Sea region after a five-month absence. Nevertheless, wheat prices remain 10.6% higher than last August. Maize prices, in contrast, rose slightly by 1.5%, reflecting the expected drop in yields due to hot and dry conditions in the EU and the USA.

Vegetable oil prices fell 3.3% to 163.3 points, lower than at the beginning of the year. This is due to the decline in international prices of palm oil, sunflower oil, and other oils, which continue to reflect the drop in demand and the prospect of adequate exports from major countries. Soyoil prices, on the other hand, rose slightly, reflecting concerns about the impact of climate conditions in the United States.

Overall, food prices have been falling from their peaks, but the rate of decline from the previous month was only modest in August compared to July (August vs. July: food price index 1.9% vs. 8.6%, grain index 1.4% vs. 11.5%, vegetable oil prices 3.3). Behind this trend, there seems to be the impact of the heat wave and drought in the USA and EU in recent months on maize and soybean yields, and we need to continue to monitor food supply and demand trends closely.

Contributor: IIYAMA Miyuki (Information Program)