World food prices hit 3-year high in July as weather, war weigh
An economist says the world faces another bout of food inflation as wars in Iran and Ukraine, along with El Niño, create a perfect storm of higher costs and lower crop yields.
Paris - World food prices soared to their highest level in over three years during July, driven by adverse weather conditions and the escalation of conflicts in key regions, according to the United Nations' Food and Agriculture Organization (FAO). The FAO Food Price Index averaged 131.1 points in July, marking a 3.4% month-on-month increase from June and the peak since January 2023.
The rise was primarily fueled by a sharp 5.8% surge in wheat prices, exacerbated by uncertainties regarding Black Sea export routes and heat-induced crop damage in major producing areas. The FAO's chief economist attributed the situation to a convergence of factors, including ongoing wars in Iran and Ukraine, El Nino weather patterns, and the escalation of hostilities in the Gulf and Black Sea, which collectively create a perfect storm of rising costs and diminished crop yields.
While sugar prices escalated 5.6% due to weather concerns and anticipated increased ethanol demand in Brazil, meat prices experienced a decline of 2.8%, reflecting a shift from record-high levels observed in June. Notably, sheep meat prices reached a three-year high, driven by constrained export supplies in Oceania. Conversely, dairy prices saw a slight decrease of 0.7%.
The FAO's overall food price index for July slightly exceeded a previous three-year peak recorded in April, yet it remained 18.2% lower than the March 2022 peak, a period marked by Russia's full-scale invasion of Ukraine.
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