London. The United Nations’ global food price index fell slightly in July, data released Friday showed.
The decline in the cereals index was partially offset by rising prices for meat, vegetable oils and sugar.
The Food and Agriculture Organization of the United Nations (FAO) price index, which tracks the most traded food products worldwide, stood at 120.8 points in July, compared with 121.0 in June. The June reading was revised after initially being given as 120.6.
By July, the FAO index had risen for four consecutive months, after hitting a three-year low in February as food prices fell from a record high reached in March 2022 following Russia’s invasion of Ukraine, a major crop exporter.
The July value was 3.1 percent lower than a year ago and 24.7 percent lower than its 2022 peak.
Russia prepares 500 thousand tons of stored grain to add to the market
Russia has allocated 500,000 metric tons of grain from the state grain fund for market interventions in the second half of 2024 to maintain price stability and encourage farmers to sell their grain stocks, the government said Friday.
“The decision will help maintain stability in the national food market,” the government said in a statement.
Domestic grain prices in Russia peaked in June and have continued to decline since the start of the new harvest. However, many farmers are holding back their stocks in the hope of getting better prices later, creating price uncertainty for millers.
This uncertainty has led to a 20-30 percent increase in flour prices since April, according to data from the Russian Union of Bakers. If this increase is passed on to bread prices, it will further fuel inflation, which is currently at 9 percent.
“The release of grain from the intervention fund is intended to stabilise raw material prices for millers. It will at least help stabilise flour prices, and possibly even reduce them,” said Igor Sviridenko of the Russian Union of Flour and Grain Enterprises.
Declining or even negative profitability of wheat production is forcing many farmers to hold on to their stocks, according to consultancy IKAR.
A market source told Reuters the government’s decision was also an attempt to send a signal to farmers to start selling now.
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– 2024-08-10 09:03:51
