Food Prices Soar Amid Trade Disruptions, Extreme Weather Flare

Global food prices witnessed a surge for the first time in three months period amid ongoing trade disruptions from India to the Black Sea and extreme weather stoke supply concerns anew.

According to a Friday report, United Nations' food-commodity prices index gained 1.3% in July, led by vegetal oil. That marks a pickup from the two-year low reached the prior month as fresh threats emerge in the supply chain, according to a Bloomberg report.

Last month, Russia exited the Black Sea grain deal that helped usher millions of tons of Ukrainian crops abroad. On top of that, top rice exporter India banned some shipments of the staple, and extreme weather is curbing harvests in places like China and southern Europe, added the Bloomberg report.

The rice index from the UN's Food and Agriculture Organization soared its highest nominal level since 2011 after India on July 20 imposed a ban on export of non-basmati varieties of rice. That "raises substantial food security concerns for a large swathe of the world population, especially those that are most poor and who dedicate a larger share of their incomes to purchase food," the FAO said.

While the index remains well below last year's record, the increase poses a fresh risk for food inflation, which remains high at the global level. Prices are still soaring in Egypt, although the run-up has begun to slow or decline in nations like Kenya and Brazil, stated the Bloomberg report.

Prices of vegetable oil prices surged 12% during the month. The surge was led by Black Sea trade uncertainties, coupled with North American crop concerns and subdued palm oil production prospects, FAO said.