The Food and Agricultural Organization (FAO) of the U.N. released the August Food Price Index on September 6th.  The Index for August averaged 138.0 points, down 1.9 percent or 2.7 points from July, representing the fifth consecutive monthly decline.  Notwithstanding the trend, the Index is 7.9 percent above the August 2021 value and closely corresponding to the U.S. rate of inflation.  The FAO Food Price Index comprises five components. Excluding sugar these comprise:-

• The Cereal Price Index averaged 145.2 points in August, down 2.0 points but 11.4 percent above August 2021.  The decline was attributed to a reduction in wheat price with higher supplies from Canada, the U.S. and the Russian Federation coupled with resumption of exports from the Black Sea region.  World corn prices were up 1.5 percent due, in part, to lower projected harvests from the EU and the U.S. as affected by drought.  This was offset by lower prices for barley and sorghum.
• The Vegetable Oil Price Index averaged 163.3 points, down 5.5 points from July.  Lower prices for palm, sunflower and rapeseed oils balanced higher prices for soybean oil.
• The Meat Price Index averaged 122.7 points in August, down 1.8 points but still 9.3 points above August 2021.  The lower value was attributed to higher availability and prices for poultry meat and a decline in beef price on weak demand.  Pork rose due to reduced supply despite lower purchases by China.
• The Dairy Price Index averaged 143.5 points in August, down 3.0 points but 27.3 points above August 2021.  Milk production was lower in Western Europe and the U.S. and there was concern over supplies from New Zealand, despite weaker demand from major importers.

Historically, the annual FAO Food Price Index has almost doubled from 2005 (67 points) to 2010 (107); 2015 (93); 2020 (98); 2021 (125) with the August 2022 Index at 138 points.