FOOD PRICES are coming off their highs. Earlier within the 12 months Russia’s invasion of Ukraine despatched costs hovering as a blockade of Ukraine’s southern ports choked off grain exports. In mid-July a UN-brokered agreement noticed the resumption of grain shipments from Ukraine, easing world costs. However as one disaster abates, one other emerges. Sizzling, dry summers in Europe and America are crimping the provision of some grains. In July the UN’s Meals Worth Index, which measures worldwide costs throughout a basket of commodities, discovered that the price of meals dropped by round 9%. New figures for August present a extra modest fall, of round 2%.
The excellent news is that meals costs in August returned to ranges final seen earlier than Russia started its blockade of Ukrainian ports. Prior to now month Ukraine has shipped greater than 1.6m tonnes of foodstuffs, primarily maize, wheat and oilseeds, by way of the Black Sea. Grain exports (together with shipments by canal, highway, rail and sea) reached virtually 3m tonnes in August, round two-thirds of the pre-war common (see chart). Whole agricultural exports are anticipated to rise to greater than 6m tonnes in October. This could ease stress on costs.
However heatwaves and droughts in Europe and components of America are nonetheless taking a toll. Final month the European Fee estimated that maize yields for 2022 could be down by 16% on the common of the previous 5 years, and eight.6% decrease than predicted in July. France expects its smallest maize harvest thus far this century. America’s Division of Agriculture forecasts a 5% annual drop in maize manufacturing. Such curbs in provide will weigh on costs.
And regardless of the latest falls, the price of food staples stays eye-wateringly excessive. The UN index is up by 8% from August final 12 months, and 34% on the August common over the earlier 5 years. Cereals and oils have turn into particularly pricey: over the previous 12 months they price a median of 45% and 93% respectively greater than the common over the earlier 5 years. Not like the port blockade, the impression of worldwide warming on meals provides is more likely to final. ■
