The United Nations Food and Agriculture Organization (FAO) reported that global food prices increased in July, driven by extreme heat and supply disruptions in the Middle East and Black Sea regions, which have impacted crop production. The FAO Food Price Index, which tracks a basket of internationally traded food commodities, averaged 131.1 points in July, up 0.6% from June and 1% higher than the same month last year.

Rising prices for cereals, sugar, and vegetable oils offset declines in meat and dairy products. Cereal prices climbed 3.4% in July, reversing the previous month's decline. Wheat prices surged due to ongoing Black Sea export disruptions and concerns over heatwave-induced production losses in major growing regions. Corn prices were also supported by hot, dry weather in parts of the United States and geopolitical tensions, while rice prices remained largely stable.

Sugar prices rose 5.6% in July. Persistent heat and drought in the European Union raised concerns about lower output, while the El Ni帽o phenomenon threatens production in key Asian sugar-producing countries. Additionally, an increase in Brazil's mandatory ethanol blending ratio in gasoline has boosted expectations for stronger ethanol demand, further supporting sugar prices.

Vegetable oil prices increased by 2%, reaching their highest level since June 2022. Palm oil prices rose on stronger demand from Indonesia's biodiesel industry and higher crude oil prices. Soybean oil prices gained ground due to robust demand for animal feed in the United States and rising global imports. However, sunflower oil and rapeseed oil prices declined.

Meat prices fell 2.8% in July from a record high in June, marking the first monthly decline this year. Poultry prices dropped due to ample export supplies from Brazil. Pork prices fell as pork supply increased in the European Union and global demand weakened. Beef prices softened due to weaker import demand from Asia. In contrast, lamb prices surged to historic highs due to tight export supplies from Oceania.

Dairy prices declined 0.7% in July, mainly driven by lower prices for whole milk powder, skim milk powder, and butter. However, cheese prices rose for the first time in a year, supported by reduced seasonal milk supplies in the European Union.