The United Nations News Center reported on Thursday that the Food Price Index, an indicator of global food prices, fell for the third consecutive month in June.
However, the the new report is overshadowed by looming concerns by the U.N. that the punishing heat endured by Americans in the Midwest will also see a sharp end to that price drop in July. The increase in price would be due to the effect of extreme heat on U.S. corn and soybean production, as reported by Reuters.
Here's a closer look at the current food prices index and what the outlook will be for July.
U.N. Group reports nearly all indexes down from May: The UN Food and Agriculture Organization's (FAO) press release showed the FAO Food Price Index was down four points, or 1.8 percent, from May at 201 points. Cereal was at 221 points, unchanged from May, while meat fell by 1.3 percent, dairy 1.5 percent, and sugar down 1.6 percent from May.
The oil and fats price has dropped precipitously, by 6.8 percent in May and by a further 5.6 percent in June. Prices for oils and fats dropped when crude oil price demands also dropped, lowering the demand for the food product's use for alternative energy.
Grain prices a concern: Despite the overall price drop, the group noted that the "continuing dryness and above-average temperatures in most of the major maize growing regions of the United States" would impact prices, as has also been affected by a lower forecast for Russian wheat. Rice prices remains mostly steady.
Prices could rise to 2007, 2008 food crisis levels: The extreme heat has put the organization on edge, with a senior economist and grain analyst warning that changes could create a "turmoil in the market," as reported by Reuters.
"We do not rule out further price increases and more price volatility until U.S. harvests," analyst Abdolreza Abbassian warned Reuters. "The next couple of months are going to be quite bumpy."
Supplies are abundant: Despite the probability that bad weather will impact prices, cereal production is at a record level 2,396 million metric tons. That number is 2 percent higher than last year's production amount and it is largely due to a large amount of rice production.
Shawn Humphrey is a former contributor to The Flint Journal and an amateur Africanist, focusing his personal studies on human rights and political issues on the continent.
