The FAO’s latest data highlights a significant shift in global food price trends. While meat and vegetable oils are experiencing record highs due to strong demand and tight supply, cereals, dairy, and sugar have moved in the opposite direction. This divergence reflects the complex interplay of supply chains, weather conditions, and geopolitical events shaping the global food market.
In July, world food commodity prices climbed to their highest level in more than two years, according to the United Nations’ Food and Agriculture Organization (FAO). The sharp increase was primarily fueled by surging vegetable oil prices and record-breaking meat costs, which outweighed declines in cereals, dairy, and sugar.
The FAO Food Price Index, a benchmark for international food commodity prices, averaged 130.1 points in July — up 1.6% from June. This marks the highest level since February 2023. However, the figure still stands 18.8% lower than the all-time high in March 2022, which followed the onset of Russia’s full-scale invasion of Ukraine.
The FAO’s meat price index reached an all-time high of 127.3 points, up 1.2% from June’s peak. The surge was driven by robust import demand from China and the United States, particularly for beef and sheep meat.
United States: Beef imports have increased as domestic cattle herds shrink due to drought conditions, limiting local supply.
China: Demand for beef has grown steadily, with record imports recorded last year. However, ongoing official investigations into imported beef have raised some concerns over future demand.
In other meat categories:
Poultry: Prices rose slightly after major buyers resumed imports of Brazilian chicken. Brazil recently regained its avian influenza-free status after containing a farm-level outbreak.
Pig Meat: Prices fell due to sufficient supply and reduced demand, especially within the European Union.
The vegetable oil price index surged to 166.8 points, marking a 7.1% rise from June and the highest level in three years. The increase was supported by:
Strong demand for palm, soy, and sunflower oils
Tightening global supplies in these segments
However, rapeseed oil prices dropped due to the arrival of new-crop supplies in Europe.
In contrast to the meat and oil markets, cereal prices fell sharply. The FAO’s cereal price benchmark dropped to its lowest level in nearly five years, largely because of seasonal supply pressures from wheat harvests in the Northern Hemisphere.
Rice: Prices declined 1.8% in July, reflecting abundant export supplies and sluggish import demand.
The dairy market saw its first decline since April 2024. Price reductions for butter and milk powders outweighed modest gains in cheese prices.
FAO’s sugar price index eased for the fifth month in a row. The decline was linked to:
Expectations of higher sugar production in Brazil and India
Signs of a recovery in global sugar import demand
The FAO did not release updated figures for global cereal supply and demand in this month’s report.