Global Food Prices Plummet by Most Since 2008
Despite assurances from government officials and central bank policy makers that inflation was going to be anything but permanent, it appears that some price pressures may be easing… or at least for now.
Latest data from the UN’s Food and Agriculture Organization shows that global food prices fell substantially in July particularly for cereal and vegetable oils. The Food Price Index stood at around 140.9 last month, marking a decline of 8.6% from June— the fourth consecutive monthly drop since soaring to record-highs at the beginning of the year.
However, the index was 13.1% higher compared to July 2021. Still, though, the sharp drop was the largest monthly decline since 2008, indicating that food access is improving. But, according to FAO chief economist Maximo Torero, there are a numerous uncertainties that remain, “including high fertilizer prices that can impact future production prospects and farmers’ livelihoods, a bleak global economic outlook, and currency movements, all of which pose serious strains for global food security.”
Indeed, inflationary concerns are showing signs of dissipating, particularly as central bankers around the world leap towards raising interest rates. At the same time, the aggressive shift towards hawkish monetary policy is also pushing major G10 economies towards a downturn in the business cycle, with the US already eclipsing into a technical recession following two consecutive periods of negative GDP output.
Information for this briefing was found via the FAO. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.