World Food Commodity Prices Remain Little Changed in August

World food commodity prices eased in August, with a fall in cereal values helping to offset gains in vegetable oils and dairy products. 

The Food and Agriculture Organization (FAO) of the United Nations on Friday said its food price index averaged 120.7 points in August, down just slightly from the revised July figure and 1.1% below last year. 

As can be seen from the graph below, the FAO food price index has held remarkably steady in 2024 (shown by the red line) compared to the past few years. The index experienced the most volatility in 2022, when it spiked to its highest on record at 159.3 points in the immediate aftermath the Russian invasion of Ukraine in February. 

Weak cereal prices have played a major role in weighing down the overall food price index in 2024. According to the FAO, its cereal price index averaged 110.1 points in August, down just 0.5% from the previous month but a steeper 11.9% below the same month last year. 

Global wheat export prices declined in August compared to July, the FAO said, reflecting “sluggish international demand and strong competition among exporters,” especially from competitively priced Black Sea supplies. Higher-than-previously-expected wheat production in Argentina and the US also contributed to the softer price tone. By contrast, world corn prices firmed slightly, mostly underpinned by concerns over the impact of heatwaves on yields in the European Union and parts of the US, it said. 

World barley prices were also lower in August versus July, but sorghum and rice prices did tick higher. 

On the other hand, the FAO vegetable oil price index averaged 136 points in August, up 0.8% month-on-month and hitting its highest since January 2023. The marginal monthly increase primarily reflected higher world palm oil prices, more than offsetting lower soy, sunflower and rapeseed oil quotations. International palm oil prices rose for the third consecutive month.  

The drop in soyoil was attributed to the potential for ample global soybean production in the 2024-25 season. Meanwhile, after rising for multiple months, world prices of sunflower and rapeseed oils also dropped, largely reflecting a slowdown in global demand and a seasonal harvest pressure in Canada. 

The dairy price index averaged 130.6 points in August, up 2.2% from July and 14.2% above its corresponding value a year ago. The meat price index averaged 119.5 points in August, down 0.7% from July, but 3.7% higher year-on-year, while the sugar price index was 4.7% lower from July and 23.2% below a year ago at 113.9 points.