Global food prices drop for sixth month, easing pain of high grocery bills

The index by the UN's Food and Agriculture Organization tracks monthly changes in the international prices of a basket of commonly traded food commodities.

Global food prices fell for the sixth month in a row in September, with sharp drops in the quotations for vegetable oils more than offsetting higher cereal prices, according to a new report from the UN's Food and Agriculture Organization (FAO).

The food price index was down 1.1% from August while remaining 5.5% higher than its value a year earlier. The Index tracks monthly changes in the international prices of a basket of commonly traded food commodities.

The fall in the price of vegetable oil drove the decline, decreasing by 6.6% to its lowest level since February 2021. International quotations for palm, soy, sunflower and rapeseed oils were all lower. 

The FAO's cereal price index, by contrast, rose 1.5% from August. International wheat prices rebounded by 2.2%, linked to concerns regarding dry crop conditions in Argentina and the US, a fast pace of exports from the European Union amid high internal demand and heightened uncertainty about the Black Sea Grain Initiative’s continuation beyond November.

Food inflation flared worldwide this year as the war in Ukraine 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.

Recent figures from market research specialists Kantar show inflation in Irish supermarkets hit just under 12% in the 12 weeks up to September. It was the highest level of food price inflation since they first began tracking prices in 2008.

It warned consumers that the price of a basket of goods will rise by €768 per annum up to €7,753 unless they make changes to how they shop.

Additional reporting Bloomberg