FAO Food Price Index posts sharp drop in July

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Last month, global prices for agricultural food products fell sharply, as all major traded commodities noted a marked decline, led by dairy products and sugar.

The Food and Agriculture Organization (FAO) indicated that the food price index averaged 168.8 points, which is 3.7 percent lower than in June, which is the largest monthly decline since the end of last year.

This year, the index has grown steadily, but in June it declined.

The FAO Food Price Index is a measure of the monthly change in world prices for a basket of goods.

The FAO dairy price index led to a decrease, down 6.6%, while oil and cheese prices fell faster than whole and low-fat milk powders.

The sugar price index in FAO fell by 6 percent to almost a three-year low, mainly due to improved production prospects in India and Thailand, which are important sugar producing countries. Expectations of lower productivity in Brazil, the world's largest producer and export, limited the fall in world sugar prices.

The FAO cereal price index fell by 3.6 percent from June and is now below the level of the previous year. Export quotations for wheat, corn and rice all declined, although wheat and corn prices rose higher by the end of July.

The FAO vegetable oil price index was 2.9 percent lower, its sixth consecutive monthly decline, and now it is at the lowest level since January 2016. Part of the July slide was caused by the overflow of weakness in the soybean market, which is influenced by the trade dispute between China and the United States of America. Nevertheless, prices for rapeseed oil increased, which was supported by an improvement in demand from biodiesel producers and negative prospects for harvest in the European Union.

The FAO meat price index fell by 1.9 percent compared to its June estimate, which was revised due to higher export prices for beef from Brazil due to the strike of truck drivers.

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