CAPE TOWN: Global food prices fell to a six-year low in July, but maize prices rose, which is negative for a maize-importing country like SA.
Higher maize prices bode ill for SA, which Grain SA estimates will need to import 766,000 tons of maize this year as drought affected production. The weak rand, which makes imports costlier, makes the situation worse. The United Nations Food and Agriculture Organisation’s (UNFAO) food price index averaged a six-year low of 164.6 points in July amid sharp declines in dairy and vegetable oil prices.
The trade-weighted index tracks prices on international markets of five major food commodity groups: cereals; meat; dairy products; vegetable oils; and sugar. The cereal price index rose by 2% to 166.5 points in July, as wheat and maize prices rose for the second consecutive month partly due to unfavourable weather in North America and Europe. Rice prices, however, continued to fall.
The dairy price index dropped 7.2% from the previous month to 149.1 points, mainly due to lower import demand from China, the Middle East and North Africa, and abundant milk production in the European Union.
