Global Heat Wave Drives Wheat, Sugar, and Oil Prices Higher, While Rice Remains Stable

UN World Food Price Index for July
Up 0.6% from Previous Month
Driven by Heat Waves and Hot, Dry Weather

Severe heat waves and abnormal weather across the globe have driven up international food prices. The prices of key grains and sugar have soared, while the cost of vegetable oils has also shown an upward trend.

On August 8, the Ministry of Agriculture, Food and Rural Affairs announced that the World Food Price Index for July, released by the United Nations Food and Agriculture Organization (FAO), stood at 131.1 points, up 0.6% from the previous month’s figure of 130.3 points.

The World Food Price Index rose from 128.7 points in March to 131.0 points in April, remained flat in May at 131.0 points, dipped slightly to 130.3 points in June, and then increased again in July.

This latest price increase was largely driven by severe heat waves and hot, dry weather affecting the production of major agricultural products, with grain and sugar prices seeing significant rises as a result.

The Grain Price Index reached 113.8 points, up 3.4% from the previous month. Wheat prices soared 5.8% in just one month, following concerns about export disruptions in the Black Sea region and expectations of poor harvests in major producing countries due to heat waves. Compared to the same month last year, wheat prices are 9.9% higher.

On the 6th, a day before Ipchu, the seasonal division marking the beginning of autumn, a farmer is spraying herbicide under the blazing sun in a green onion field in Dasan-myeon, Goryeong-gun, Gyeongbuk. Photo by Yonhap News.

Corn prices also climbed, rising 3.6% from the previous month due to concerns over reduced production caused by hot and dry weather in parts of the Corn Belt—the main corn-growing region of the United States—and from higher energy prices stemming from geopolitical tensions. In contrast, barley prices fell by 1.9% thanks to positive crop forecasts in Australia and the Black Sea region, while rice prices remained largely stable.

Sugar prices were also affected by unusual weather. The Sugar Price Index reached 95.0 points, up 5.6% from the previous month. There is growing concern that hot and dry weather in the European Union (EU) could impact sugarcane and sugar beet yields, while El Nino-related weather conditions in major Asian producing countries are adding to uncertainties and pushing prices higher. Additionally, Brazil’s increased mandatory ethanol blending ratio has also stoked expectations of reduced sugar supply, contributing to the price increase.

The Vegetable Oil Price Index registered 195.7 points, a rise of 2.0%. Palm oil prices increased due to greater biodiesel demand in Indonesia and rising global oil prices, while strong raw material demand in the United States and increased global import demand drove up soybean oil prices.

In contrast, the prices of meat and dairy products declined. The Meat Price Index fell by 2.8% to 127.7 points, marking the first decrease this year. This decline was influenced by decreased poultry prices following expanded supply in Brazil, greater pork supply in the EU, and diminished beef import demand in Asia.

The Dairy Price Index also dropped, falling 0.7% from the previous month to 116.2 points, mainly due to lower butter and milk powder prices.

Despite rising international food prices, domestic agri-livestock product prices remained relatively stable. In July, the domestic consumer price index for agricultural and livestock products increased by 0.5% compared to the same month last year, significantly lower than the overall consumer price inflation rate of 2.8% during the same period.

The Ministry of Agriculture, Food and Rural Affairs plans to strengthen monitoring of supply and demand conditions for each item and respond proactively to prevent any supply disruptions caused by summer weather conditions such as heat waves or droughts, thereby putting the utmost effort into supply and demand management.

This content was produced with the assistance of AI translation services.