As soaring food prices continue to wreak havoc around the world, consumers are finding respite in cooking oil, coffee and avocado.
Prices for these foodstuffs are beginning to fall although they remain relatively high, according to the latest food price data.
In Asia-Pacific, Indian prices for sunflower oil and palm oil fell 7% and 12% respectively between late May and June, agricultural commodity data group Tridge said.
During the same period, palm oil prices in Bangladesh fell by almost 25%.
In Vietnam, wholesale coffee prices fell nearly 5% in July, compared to the start of the war in Ukraine in late February.
On the other side of the globe, prices for avocados from the biggest producers in Mexico, Peru and Colombia have fallen, according to Tridge, which has visibility into food commodity prices thanks to the exchanges they facilitate. .
Prices for avocados from the largest producers, Mexico, Peru and Colombia, have fallen, according to Tridge, an agricultural commodities data group.
Luis Antonio Rojas | Bloomberg | Getty Images
Wholesale Mexican avocado prices fell 27% between June and July, while Colombian avocado prices fell nearly 40%.
In the case of avocados, however, there are other forces at play. The avocado market has been hit by an oversupply of Peruvian avocados which has also put downward pressure on avocado prices in the area, Tridge said.
Price inflation encourages consumers to limit their consumption of certain foods when they are a necessity, and there are concerns about food safety.
Moreover, fears of an impending recession are forcing them to tighten their belts, said Minwoo Nam, a spokesperson for Tridge.
“Multiple factors are affecting the market. First, the fear of a global recession is clouding the demand outlook,” Nam said.
“Also because prices have gone too high, [so] consumers are spending less or looking for substitutes,” he said, citing sunflower oil as an example.
Food traders and other market participants tell Tridge that some hedge funds have also started to liquidate their commodity positions.
But as consumers adjust their spending, that doesn’t mean food inflation is completely under control, Nam said.
A woman shops at a supermarket as rising inflation affects consumer prices in Los Angeles, California, June 13, 2022.
Lucy Nicholson | Reuters
“We can say that concern about food inflation has eased somewhat, but prices for many agricultural products are still high compared to average years. The contractionary policies are certainly affecting the market,” Nam said.
However, it hasn’t reversed so hard that no one is spending, Nam added.
Supply chain disruption
There is still a shortage of food due to the disruption of supply chains and the demand for food is still buoyant.
But at least for now, some of the efforts by governments and central banks are starting to drive down food prices, according to Nam.
“The disruption in the supply chain is still affecting the market and driving up the prices of many products,” Nam said.
“It doesn’t seem likely that food prices will suddenly fall into recessionary territory. However, the likelihood of fiercer inflation has diminished.”
While still near record highs, the Food and Agriculture Organization of the United Nations’ food price index fell for a third consecutive month in June, from a record high in March. . The food index tracks the monthly change in world prices for a basket of food products.
June’s decline reflected lower international prices for vegetable oils, grains and sugar, but dairy and meat prices rose, the UN food agency said.
The FAO Cereals Price Index also showed that international prices of food commodities like wheat fell in June compared to May, but are still very high after near record highs in May. Prices are still 48.5% higher than at the same time last year.