published an article
stating food prices dropped significantly in July from the previous month, particularly the costs of wheat and vegetable oil. While the drop in food prices “from very high levels” is “welcome,” there are doubts over whether the good news will last. Analysts cited a mix of both demand and supply reasons for the slide in food prices: Ukraine and Russia’s closely watched agreement to resume exports of grain through the Black Sea after months of blockade; better-than-expected crop harvests; a global economic slowdown; and the strong U.S. dollar. Rob Vos
, the director of Markets, Trade, and Institutions, pointed to the news that the United States and Australia are set to deliver bumper wheat harvests this year, which will improve supply since shipment from Ukraine and Russia have been curtailed. The higher U.S. dollar also lowers the price of staples, since commodities are priced in U.S. dollars, Vos said. Traders tend to ask for lower nominal dollar prices of commodities when the greenback is expensive.