As soaring food prices continue to wreak havoc globally, consumers are finding some pitfalls in cooking oils, coffee and butter.
The latest food price data shows that prices for these food items are starting to drop but remain relatively high.
In the Asia-Pacific, Indian sunflower and palm oil prices fell 7% and 12% respectively between late May and June, agri-commodity data group Tridge said.
During the same period, palm oil prices in Bangladesh fell by nearly 25%.
In Vietnam, wholesale coffee prices have fallen by nearly 5% in July, compared with the start of the Ukraine war in late February.
On the other side of the world, avocado prices from the biggest producers Mexico, Peru and Colombia have fallen, according to Tridge.
A woman shops in a supermarket as rising inflation affects consumer prices in Los Angeles, California, June 13, 2022.
Lucy Nicholson | Reuters
Wholesale prices of Mexican avocados fell 27% between June and July, while Colombian avocado prices fell by almost 40%.
However, in the case of the avocado, 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 region, Tridge said.
Fears retreat
Price inflation is causing consumers to limit their consumption of certain foods even though they are essential, and there are concerns about food security.
Furthermore, concerns about an impending recession are forcing them to tighten their belts, said Minwoo Nam, a spokesman for Tridge.
“There are many factors affecting the market. First of all, fears of a global recession are dampening the demand outlook,” Nam said.
“Also because the price is too high, [so] Consumers are spending less or looking for alternatives,” he said, taking sunflower oil as an example.
Food traders and other market participants told Tridge that some hedge funds have also begun liquidating their positions in commodities.
But as consumers adjust their spending, that doesn’t mean food inflation is fully contained, Nam said.
Mr. Nam said: “It can be said that the fear of food inflation has been somewhat reduced, but the prices of many agricultural products are still high compared to the average of the years.
Nam added
Supply chain disruption
Food supplies are still lacking due to supply chain disruptions and food demand remains high.
But at least for now, some efforts of governments and central banks are starting to cool down food prices, according to Nam.
It seems unlikely that food prices will suddenly fall into recession territory. However, the possibility of more severe inflation has decreased.
“Supply chain disruptions are still affecting the market, and it is pushing up prices of many products,” said Nam.
“It seems unlikely that food prices will suddenly slip into recession territory. However, the likelihood of more acrimonious inflation has decreased.”
While still hovering near record highsUnited Nations’ Food Price Index of the Food and Agriculture Organization fell for the third consecutive month in June, record in March. The Food Index tracks the monthly change in the global price of a basket of food commodities.
The UN food agency said the June drop reflected a drop in international prices of vegetable oils, grains and sugars, but increased milk and meat prices.
The FAO Cereal Price Index also showed that international food prices such as wheat fell in June compared with May but remained very high after May’s near-record levels. Prices are still 48.5% higher. compared to the same time last year.
