(Bloomberg) -- Global food prices retreated for the first time in a year, potentially offering some relief for consumers and easing inflationary pressures.
A United Nations gauge of food costs fell 2.5% in June, easing from a nine-year high and marking the first decline since May 2020. Prices of vegetable oils and cereals declined during the month, offsetting gains in meat and sugar.
Prices of grains to meat to vegetable oils -- ingredients that feed through to countless items in grocery stores -- rallied this year on big Chinese imports, the reopening of economies and weather risks to crops. Last month’s decline could reduce inflation risks, both for central banks facing pressure to tighten stimulus measures as well as poorer nations that are highly dependent on imports to feed their populations.
There may be more relief in store for consumers in the medium to long term. A recent outlook from the UN and Organisation for Economic Cooperation and Development forecast slowing demand and rising output to temper food prices in the coming years.
Still, the UN gauge remains historically high, and crop prices are hinging on the weather in the months ahead to determine whether harvests across Europe and North America will be large enough to replenish strained stockpiles.
“The effects of the Covid-19 pandemic, primarily in terms of income losses, have exacerbated vulnerabilities and heightened existing levels of food insecurity,” the FAO said on Thursday.