Global food prices dropped significantly in July, easing inflationary pressures – although the good news may not last long.
The United Nations Food and Agriculture Organization said that its index, the price of a basket of commodity foods, fell 8.6% in July from June. The drop was spearheaded by declines in prices for grains and edible oils, two commodities that have been disrupted by the war in Ukraine.
One reason for that decline was an agreement between Ukraine and Russia to allow grain-laden cargo ships to leave Ukrainian ports. Bumper crops of wheat in the U.S. and Australia also helped.
However, the July index is still 13% higher than it was in July 2021. And the Russia-Ukraine truce allowing wheat exports is seen as fragile, with Russia having fired rockets at the port of Odesa shortly after it was concluded.
