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Global food prices rose sharply in July, driven by worsening conflicts around the world and severe weather disruptions that have hit crop production and global supply chains.
The UN Food and Agriculture Organization’s (FAO) food price index rose to 131.1 points in July, up 0.6% from June and nearly 1% from the same month last year. It was the highest level since January 2023, according to recent FAO data cited by Reuters and other international media.
Despite the increase, the index remained 18.2% below its record high reached in March 2022, shortly after Russia’s invasion of Ukraine sent global food prices soaring.
The July increase was mainly driven by higher prices for cereals, vegetable oils and sugar. Meat and dairy prices, however, declined during the month.
The FAO cereal price index rose 3.4% in July to 113.8 points. Wheat prices increased 5.8% as damage to port infrastructure and disruptions to exports in the Black Sea region raised concerns over supplies amid the Russia-Ukraine war.
Corn prices also climbed 3.6%, as heatwaves in major producing regions and drought in the United States affected production. Rice prices remained relatively stable on international markets.
Vegetable oil prices rose 2% in July, reaching their highest level in four years. Higher palm oil and soybean oil prices drove the increase. Strong demand from Indonesia’s biodiesel sector and higher global energy prices supported palm oil prices, while strong domestic demand in the United States pushed up soybean oil prices.
Sugar prices increased 5.6%, with drought and adverse weather conditions in Europe and Asia disrupting production.
The FAO warned that prolonged conflicts in the Middle East and Eastern Europe, combined with climate-related weather shocks, could pose renewed risks to global food security if disruptions to agricultural production and suppl