UN index says weather is affecting wheat yields while conflicts in Ukraine and Iran hit exports and drive up prices<\/p>\n
Global food prices have hit their highest level in three and a half years, as summer heatwaves and conflict in Ukraine and the Middle East push up crop costs.<\/p>\n
The UN Food and Agriculture Organization (FAO) index of food commodity prices rose last month to its highest level since January 2023, after a jump in prices for cereals, sugar and vegetable oil.<\/p>\n
The FAO cited heatwaves as a factor hitting wheat yields in several key producing countries, while sugar prices were driven up by fears over \u201cpersistent hot and dry weather on crop yields in the European Union\u201d and of damage caused by the rapidly developing El Ni\u00f1o weather system.<\/p>\n
The index, which tracks monthly changes in a basket of internationally traded food commodities, rose to 131.1 points in July, up from 130.3 in June.<\/p>\n
It showed that cereal prices rose by 3.4% month on month in July, including a 5.8% increase in global wheat costs. Continued disruptions to Black Sea export flows and damage to export infrastructure, after intensified attacks between Russia and Ukraine, pushed up prices.<\/p>\n
World maize prices increased by 3.6%, which the FAO attributed to \u201cconcerns over hot and dry weather in parts of the Corn Belt in the United States of America\u201d.<\/p>\n
The deadly heatwave that swept across Europe in June, inflamed by carbon emissions, is estimated to have forced grain farmers to destroy 9m tonnes of crops such as wheat, barley, maize and oats.<\/p>\n
Sugar prices jumped by 5.6% in July, which the FAO put down to weather fears and new rules in Brazil increasing the amount of ethanol that can be added to gasoline that led to increased demand from fermenters.<\/p>\n
Vegetable oil prices rose 2%, which the report attributed to firm demand from Indonesia\u2019s biodiesel sector and higher crude oil prices.<\/p>\n
The Iran war has also been pushing up food prices in recent months, as about a third of fertiliser production travels through the strait of Hormuz.<\/p>\n
Meat prices fell by 2.8% in July \u2013 the first monthly fall this year \u2013 with poultry, pig and beef prices all down. However, high summer temperatures limited pigs\u2019 growth rates, providing some price support, the FAO said.<\/p>\n
Dairy prices slipped by 0.7%, pushed down by a 2.4% drop in butter prices and cheaper milk powders. Cheese prices rose by 1.7%, their first monthly rise in a year.<\/p>\n
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Increased food commodity prices tend to translate into higher prices on the shelves in future months, as suppliers pass on their costs to consumers.<\/p>\n