Progress Against Global Food Price Inflation?

Amid the steady flow of grim economic news of late comes this droplet of optimism from the UN’s Food and Agriculture Organization: The FAO Food Price Index, already revised downward from initial readings for June, dropped significantly in July. Athough food prices are still significantly above where they were in July of 2021, global food price inflation has “improved” to approximately 13% year on year..

The FAO Food Price Index* (FFPI) averaged 140.9 points in July 2022, down 13.3 points (8.6 percent) from June, marking the fourth consecutive monthly decline. Nevertheless, it remained 16.4 points (13.1 percent) above its value in the corresponding month last year. The July decline was the steepest monthly fall in the value of the index since October 2008, led by significant drops in vegetable oil and cereal indices, while those of sugar, dairy and meat also fell but to a lesser extent.

While food price inflation and food insecurity remain major problems for countries around the world (e.g., Sri Lanka, Panama, Peru), here we have one metric suggesting that global food price inflation, while still high and still a problem, may have peaked.