Global food prices lowest in two years, says FAO

Items on the UN body's monthly food price index have not been this cheap since March 2021. At the same time, rice prices hit a record high in August. Global prices for staple foodstuffs have reached a two-year low in August, the United Nations' Food and Agriculture Organization (FAO) said on Friday.

The organisation's Food Price Index has not been on this level since March 2021 and has declined as much as 24% compared to March 2022, when it was at its all-time high following Russia's full-scale invasion of Ukraine.

In a statement, the FAO said, "the drop reflected declines in the price indices for dairy products, vegetable oils, meat and cereals."

Most commodities fall, rice skyrockets in price

According to the UN body, an ample supply of these foodstuffs has led to the price decline. Some commodities, like sunflower oil or sheep meat, have also seen weakening demand.

Sugar and rice, however, have been increasing in price, with the latter hitting a 15-year high. This is mainly due to export restrictions imposed by India, the world's largest producer of rice.

Exploding rice prices have been exacerbated by extreme weather conditions — key among them the return of the oceanic phenomenon El Nino, which could endanger harvests around the world.

Its potential effect on sugarcane crops has also driven up sugar prices, together with dry weather in Thailand, one of the leading sugar producers.

Cereal prices decline despite failed grain deal

Prices for cereals have come back down from last month, the FAO said, despite the continued suspension of a grain deal between Russia and Ukraine. This is mainly due to higher temporary availability in the harvesting season in the northern hemisphere.

Russia had pulled out of the agreement allowing Ukraine to export grain in July, sparking concerns over a worsening global food crisis. Negotiations to revive the deal are currently ongoing.