Food prices for coffee, cooking oil and avocados are declining but still high

With soaring food prices continuing to wreak havoc globally, consumers are finding some relief in cooking oil, coffee and avocados.

The prices of these foodstuffs have started to decline although they are still relatively high, according to the latest food price data.

The prices of sunflower oil and palm oil in the Asia Pacific region fell 7% and 12%, respectively, between the end of May and June, said the agricultural commodity data group, Trige.

During the same period, palm oil prices in Bangladesh fell by almost 25%.

In Vietnam, wholesale coffee prices fell by about 5% in July, compared to the start of the Ukraine War in late February.

On the other side of the world, avocado prices have fallen from the biggest producers in Mexico, Peru and Colombia, according to Tridge, which has a view of food commodity prices through the trade they facilitate.

Avocado prices are down from the biggest producers in Mexico, Peru and Colombia, according to Tridge, an agricultural commodity data set.

Luis Antonio Rojas | Bloomberg | Getty Images

Wholesale prices of Mexican avocados fell by 27% between June and July, while prices of Colombian avocados fell by about 40%.

But in the case of avocados, there are other forces at play. The avocado market has come under heavy criticism due to an oversupply of Peruvian avocados, Tridge said, which has also put downward pressure on avocado prices in the region.

Recession fears

Price inflation forces consumers to reduce consumption of certain foods even though they are necessary, and there are concerns about food security.

Moreover, fears of an impending recession are forcing them to tighten their belts, said Minwoo Nam, a spokesperson for Tridge.

“There are several factors affecting the market. First of all, the fear of a global recession is dampening the demand outlook,” Nam said.

“Also due to the high prices, [so] Consumers are spending less or looking for alternatives,” he said, citing sunflower oil as an example.

Food traders and other market participants told Tridge that some hedge funds were also beginning to liquidate their positions on commodities.

While consumers adjust their spending, Nam said, this does not mean that food inflation is being completely curbed.

A woman shops in a supermarket as rising inflation affects consumer prices in Los Angeles, California, June 13, 2022.

Lucy Nicholson | Reuters

“We can say that the concern about food price inflation has subsided to some extent, but the prices of many agricultural products are still high compared to the average of years. Deflationary policies definitely affect the market,” Nam said.

However, Nam added, it hasn’t gone down so hard that no one is spending.

supply chain disruption

Food prices don’t seem to suddenly fall into stagnation. However, the potential for more aggressive inflation has declined.

“Supply chain disruption continues to affect the market, and it is driving up prices for many products,” Nam said.

“It does not seem likely that food prices will suddenly rush into recession. However, the potential for fiercer inflation has diminished.”

While still hovering near record levelsUnited nations’ FAO Food Price Index It declined for the third month in a row in June. Unpublished in March. The Food Index tracks the monthly change in world prices for a basket of food commodities.

The drop in June reflected lower international prices for vegetable oils, grains and sugar, but dairy and meat prices rose, the UN food agency said.

The FAO Cereal Price Index also showed that international prices of foods such as wheat fell in June compared to May but are still very high after record levels in May. Prices are still 48.5% higher than the same period last year.