Global food prices are currently on a downward trend since the type of extreme weather events that disrupt production have been largely absent this year as compared to last.
The Food and Agriculture Organisation of the United Nations (FAO) releases a series of monthly price indices for a variety of food commodities (here) at the beginning of each month. The headline FAO Food Price Index is a composite of five food groupings: meat, dairy, cereals, oils and fats and sugar. The base 100 is the indexed averaged price for the 2002-2004 period. The July 2013 index number was released on August 8th. Key points are as follows:
- The FAO Food Price Index averaged 2o5.9 for July 2013, down 4.2 points from the revised value of 210.1 for June
- The index was down 7.1 points from the 213.0 recorded in July 2012, or 3.3 percent
- In inflation adjusted terms, the Food Price Index stood at 136.8 for July 2013 against the 2002-2004 base of 100
Cereal prices have been leading the aggregate index down, with maize in particular showing significant falls in price on the back of good harvests in many producing areas across the globe. The sub-indices can be found here.
At this point, I usually highlight the long-term correlation between food prices and oil prices, but the World Bank recently came out with a report that looked at this relationship in some detail and I intend to post on it over the next few days.
Risk and Well-Being 