Compared to May, the food price index (CPI) in June decreased by 2.5% and amounted to 124.6 points.
This information was provided by the Food and Agriculture Organization of the United Nations.
Despite the positive dynamics in comparison with May, compared to last summer, the CPI is still much higher: by 34%.
The main reason for this growth is, of course, the coronavirus pandemic, which has halted production in many countries and forced states to stockpile food. The demand for food has grown dramatically — and so have prices.
At the same time, different categories of products showed different dynamics of price changes.
Vegetable oil — minus 9.8%.
Grain — minus 2.6%.
Milk — minus 1%.
Sugar — plus 0.9%.
Meat — plus 2.1%.
Vegetable oil «sagged» most of all. Many exporting countries are now harvesting or preparing to harvest oilseeds. Good views lead to lower prices.
In addition, some countries have reduced demand for butter and milk, which also led to an oversupply in the world market.
Will product prices continue to decline?
Unfortunately, most experts are sure not.
As analyst Andrei Vernikov noted, the current drop is just a correction against the background of a serious rise in prices, which has been going on for almost a whole year.
It is very naive to hope that prices will reach pre-pandemic levels tomorrow.
Even if we exclude the factor of the pandemic itself, its consequences will remain.
For example, in order to strengthen the economy, most central banks in the world have lowered the key rate, and this in itself makes money cheaper and accelerates inflation. Everything will inevitably rise in price.
But analyst Ekaterina Kosareva looks at things more optimistically. According to her, Russian domestic prices follow world prices.
During the year, world markets went up, and this caused, among other things, the desire of manufacturers to sell products for export as much as possible. The state even had to introduce bans (quotas, duties).
Now, in the face of falling world prices, there is hope for a decrease in domestic prices as well. After all, selling abroad will no longer be so profitable, which means that a significant part of food will remain inside the country, creating an excess of supply.
The actions of the Russian government to regulate prices may lead to the fact that Russia, as a large producer, will be able to offer its citizens prices below world prices.
World food prices are currently expected to decline due to the new harvest.
But experts warn that this is just a seasonal fall, and in general, the rise in prices is likely to continue.
