World food prices posted their biggest drop since 2008 after concerns over supplies of grains and vegetable oils eased as Ukraine moved toward restarting exports.
A United Nations index of global food costs plummeted nearly 9% in July. The index fell to its lowest level since January, before a Russian blockade of the ports of Ukraine, a major food exporter, pushed food costs to a record.
The UN index fell for a fourth month, offering some relief to consumers facing a deepening cost-of-living crisis that encompasses everything from energy to transportation. Still, prices remain high, putting pressure on households as global hunger worsens.
Wheat and corn prices fell last month after Moscow and kyiv reached an agreement to reopen Ukraine’s ports and the first ship sailed from Odessa. But two weeks into the deal, a host of challenges remain to be resolved before exports can pick up. Three more grain ships left the country’s ports on Friday.
“Higher seasonal availability in Argentina and Brazil, where maize harvests advanced above last year’s pace, also helped ease price pressure,” the FAO said in a statement.
The UN index tracks commodity export prices and excludes retail markups, so while it’s a more encouraging sign for consumers, they still face high prices. Africa’s Sahel region is experiencing the worst food security crisis in a decade, with tens of millions across the continent facing hunger.
Food giant Nestlé SA carried out another round of price hikes to consumers during the second quarter as its own costs increased. Supermarket group Ocado said consumers are switching to cheaper products to save money.
Food prices had already risen during the pandemic as logistics hurdles caused problems and demand outstripped supply as the economy recovered. But now the start of harvests in the northern hemisphere and concerns about a looming recession are weighing on commodities.