The Food and Agriculture Organisation of the United Nations Food (FAO)'s price index is a monthly trade weighted index compiled by tracking international market prices of five food commodity food groups.

The index averaged 179.1 points in July, its highest value since January 2015, marking a 2.3% increase from June 2017 and 10.2% from its level in July 2016.

The FAO dairy price Index gained 3.6% in July, underpinned by stronger prices for butter, cheese and WMP (whole milk powder). Tighter export availabilities pushed butter prices to a new high in July, widening further the spread between butter quotations and other dairy products.

The cereal index was up 5.1% in July. The index has been rising consistently over the past three months, supported by firmer wheat and rice quotes.

The sugar index rose by 5.2% but the vegetable Index fell by 1.1%, while the FAO meat Index remained steady in July.

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Global food prices rose by 2.3% in July

This is the third consecutive month of food price increases driven by higher dairy, cereal and sugar quotes, writes John Boylan.