Food prices drop again, offering potential relief to consumers

Costs for vegetable oils, sugar, meat and dairy products retreated as global food prices fell for a sixth month

A customer shops for food items inside a Tesco supermarket store in east London, England. PHOTO BY DANIEL LEAL/AFP VIA GETTY IMAGES FILES

Global food prices fell for a sixth month, potentially offering relief to consumers battered by across-the-board inflation.

Agricultural demand is easing on mounting worries about an economic downturn that risks curbing dairy sales and biofuel use. Plus, crop exports from Ukraine have picked up, buffering world grain supplies that had been threatened by Russia’s invasion.

A United Nations gauge of food prices declined 1.1 per cent in September to the lowest since January. Costs for vegetable oils, sugar, meat and dairy products retreated, keeping the index in the longest slump since 2015, the UN’s Food and Agriculture Organization said Friday.

Still, grain prices were the one key category to gain last month as bad weather battered U.S. and European crops. The FAO on Friday lowered its grains-output outlook for this season, though that was offset by weaker demand prospects.

Food inflation flared worldwide this year as the war curbed crop supplies from the vital Black Sea region. While the picture improved somewhat in recent months after a deal was struck for Ukraine to resume seaborne shipments, much will depend on efforts to extend the crop-export corridor beyond mid-November. Uncertainty over the accord also supported grain prices in September.

World food-commodity prices are now about 15 per cent below a record set in March, though the latest decline will take a while to trickle through to grocery stores. Supermarket prices are also determined by energy, transportation and labor costs.

Source: Financial Post