The risk of a global food crisis are falling

After months of uninterrupted increases in food prices, some good news are coming in. In July 2022, the benchmark index of the Food and Agriculture Organization (FAO, Food Price Index FPI) - which tracks prices on the main world markets - lost 13%, after a few months around the maximum values reached in March 2022.

The jump in prices with the explosion of the Russian-Ukrainian war that had caused fear of triggering of a serious global humanitarian crisis seems to have been quickly reabsorbed. Prices obviously remain close to the peaks experienced during the hard crises of the recent past. But there are reasons to believe that the worst is behind us, also having considered that the agreement between Russia, Turkey and Ukraine under the aegis of the United Nations that allows the sea transit of grain shipments is finally operational.

Vegetable oils, palm, soybean, rapeseed and sunflower oils experienced the greatest decline. International prices of palm, soybean and rapeseed oil declined mainly due to weak global demand and the prospects for large supplies from Indonesia, the world’s largest exporter. In the case of sunflower oil, international prices have fallen despite continuing logistical uncertainties in the Black Sea.

On the international cereals market, thanks to a joint international effort to unblock the main Ukrainian ports of the Black Sea, wheat prices fell by almost 20% in July 2022. By mid-August 2022, 12 ships had already departed from Ukrainian ports.

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Compared to the pessimistic assessments of a few months ago that were heavy-handed on the global impact of the war, FAO sees a substantial holding of the main cereals' global reserve stocks. Modest contractions are expected for coarse grains and rice stocks, while wheat reserves are expected to remain broadly constant.