Global food commodity prices rose in July to their highest level since January 2023, driven by higher cereal, sugar and vegetable oil prices, according to the UN Food and Agriculture Organization (FAO).
The FAO Food Price Index averaged 131.1 points, up 0.6 per cent from June and 1 per cent from a year earlier. Despite the increase, prices remained 18.2 per cent below their record high reached in March 2022.
The FAO Cereal Price Index rose 3.4 per cent month on month to 113.8 points, with wheat prices increasing 5.8 per cent.
The FAO attributed the rise to concerns over disruptions to Black Sea export flows, damage to export infrastructure and the impact of heatwaves on crops in several major producing regions.
Maize prices also rose 3.6 per cent, partly due to hot and dry conditions in parts of the U.S. Corn Belt and stronger energy prices amid heightened geopolitical tensions.
The Vegetable Oil Price Index increased 2 per cent to 195.7 points, its highest level since June 2022. Higher palm and soybean oil prices outweighed declines in sunflower and rapeseed oil.
Palm oil prices were supported by strong biodiesel demand in Indonesia and higher crude oil prices, while soybean oil benefited from robust feedstock demand and stronger global imports.
The Sugar Price Index climbed 5.6 per cent in July, although it remained 8 per cent below its level a year earlier. The increase was driven by concerns over hot and dry weather in Europe and production risks in major Asian producers.
Expectations of stronger ethanol demand in Brazil also supported sugar prices, as higher ethanol blending requirements could divert more sugarcane towards fuel production.
The rise in food prices was partly offset by lower meat and dairy costs.
The FAO Meat Price Index fell 2.8 per cent in July, marking its first monthly decline of the year, while remaining 0.8 per cent above its level a year earlier.
The Dairy Price Index declined 0.7 per cent, extending a downward trend that began in April. Lower prices for butter and milk powders outweighed an increase in cheese prices.
The FAO said geopolitical tensions and extreme weather continue to create upward pressure on some agricultural commodities, keeping supply risks in focus despite global food prices remaining well below their 2022 peak.
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An agreement between Iran and the U.S. to reopen the Strait of Hormuz is expected "soon," a U.S. official has said. The deal would result in the resumption of commercial shipping through the sea passage and the lifting of an American naval blockade on Iranian ports.
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U.S. President Donald Trump said negotiations to reopen the Strait of Hormuz are progressing and suggested an agreement with Iran could be reached “soon”.
A deal on a new route for vessels through the Strait of Hormuz is "very close," Iranian Foreign Minister Abbas Araghchi has said, while warning that the reopening of the waterway depends on the U.S. meeting other conditions, including paying compensation to Iran.
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Ukrainian President Volodymyr Zelenskyy said Ukraine is increasingly penetrating Russia's air-defence network, as both sides stepped up overnight strikes on energy, logistics and port infrastructure.
Türkiye has started restricting commercial ship traffic into the Black Sea due to the government's increasing concern about a surge in Russian and Ukrainian attacks on ships, Bloomberg News has reported, citing unnamed sources.
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Spain checked around 200 travellers arriving from Italy on the first day of reintroduced border controls, following a dispute between the two countries over irregular migration.
Typhoon Dolphin is expected to make landfall on China’s east coast overnight on Sunday, bringing torrential rain and powerful winds as authorities prepare for flooding and landslides across large parts of eastern China.
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