World food prices fell for the fifth month in a row in August, and their index moved further away from the record set at the beginning of the year. In addition, the resumption of grain exports from Ukrainian ports contributed to improving supply prospects. This was reported by the Food and Agriculture Organization of the United Nations (FAO).
The composite index, which tracks prices of cereals, vegetable oils, dairy products, meat and sugar on international markets, fell to 138 points from 140.7 points in July, FAO said.
This year’s harvest is slightly lower than last year’s, grain prices will not drop significantly
This year’s harvest is over in the Czech Republic, as of August 25, farmers harvested 99.63 percent of cereals and 99.99 percent of rapeseed. This year’s harvest was significantly accelerated by the drought, last year 76 percent of cereals and 95 percent of canola were harvested by this time. This was stated by Minister of Agriculture Zdeněk Nekula (KDU-ČSL) and President of the Agrarian Chamber of the Czech Republic Jan Doležal at the Země živitetelka agrosalon.
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Compared to last August, however, the index is 7.9 percent higher. In March of this year, after the Russian invasion of Ukraine in February, the index rose to a record 159.7 points.
The cereal price index decreased by 1.4 percent month-on-month in August. It had an effect on it the re-opening of Ukrainian ports in the Black Sea following a diplomatic agreement and favorable prospects for the wheat harvest in North America and Russia. But corn prices rose 1.5 percent as hot and dry weather reduced production prospects in Europe and the United States.
Another morning for food prices. European ammonia producers cut production, it will damage crops
News from companies
The difficult situation in the production of fertilizers is worsening in Europe, a third European company has already announced that it will limit the production of ammonia, which is essential for the production of fertilizers. It is the Norwegian company Yara International, the reason being record gas prices. This was reported by the Bloomberg agency, according to which the production of nitrogen fertilizers in Europe fell by more than a quarter after the Russian invasion of Ukraine. According to experts, falling fertilizer stocks can affect the harvest and eventually the price of food.
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Sub-indices of prices for vegetable oils, sugar, dairy products and meat also fell. This is partly due to improved deliveries.
At the same time, the FAO lowered its outlook for cereal production this year to 2.774 billion tons from July’s 2.792 billion tons. This is 1.4 percent less than the estimated production for last year. This is due to the prospect of a weaker corn harvest in the Northern Hemisphere due to the weather. In the EU, revenues are expected to fall below the five-year average by 16 percent.
FAO also expects cereal consumption to outpace production in 2022/2023, leading to a projected 2.1 percent decline in global stocks from 2021/2022 to 845 million tonnes.
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High inflation troubles not only the Czechia, but also other European countries and the United States. See the overview in the world.