World market prices for agricultural products showed a slight increase (+1.3%) in July for the first time in seven months. As a result, the FAO food index rose to 123.9 points. This is still 11.8 percent lower than a year ago.
A decisive factor, according to the FAO, was a sudden rise in the price index for vegetable oil, which after seven consecutive months of decline, increased sharply by 12.1 percent. This largely reflected the price surge of (Ukrainian) sunflower oil by more than 15 percent.
Market experts attribute the rise in food prices not only to the end of the grain agreement but especially to new trade restrictions in India on rice exports. The Indian export ban applies to all types of rice except basmati rice, broken rice, and certain types of parboiled rice. The measure affects about half of all exports from the Asian country, which accounts for over 40 percent of global rice exports.
The FAO index for all rice increased by 'only' 2.8% in July compared to June but by as much as 19.7% compared to last year, reaching the highest level since September 2011 (the time of the terrorist attacks on the Twin Towers in New York). This upward pressure on rice prices "leads to significant concerns about food security for a large part of the world's population, especially the poorest," warned the FAO.
The FAO monthly overview also shows that international wheat prices rose by 1.6%, their first increase in nine months, due to uncertainty about exports from Ukraine and ongoing dry conditions in North America. A 4.8% decline in the international coarse grain price, due to increased seasonal corn supplies from ongoing harvests in Argentina and Brazil, resulted in a 0.5% decrease in the grain price index.
The dairy price index decreased by 0.4% and is now 20.6% lower than in 2022. Global cheese prices recovered slightly after warm weather affected the seasonal decline in milk supply in Europe.
Prices for beef, sheep, and poultry meat fell in July due to solid supply and, in some cases, lower demand from major importers. This led to a 0.3% drop in the meat price index for July. Conversely, pork prices rose, reflecting high seasonal demand combined with persistently tight supplies from Western Europe and the US, according to the FAO.