Global food prices fell for the first time in a year, potentially offering some relief for consumers and easing inflationary pressures.

A United Nations gauge of food costs dropped 2.5 per cent in June, easing from a nine-year high and marking the first decline since May 2020. Prices of vegetable oils and cereals declined during the month, offsetting gains in meat and sugar.

Costs of grains to meat to vegetable oils -- ingredients that feed through to countless grocery items -- rallied this year on big Chinese imports, the reopening of economies and weather risks to crops. Last month’s decline could reduce inflation risks, both for central banks facing pressure to tighten stimulus measures as well as poorer nations that are highly dependent on imports to feed their populations.

Still, the index tracks costs on a raw-material level and it takes time for price changes to feed through to store shelves. Shipping costs have also soared, complicating trade of products like sugar, and the UN’s Food and Agriculture Organization last month predicted the global food import bill to hit an all-time high in 2021.

“I don’t think that we’ll see the impact of this mild decline being felt by consumers given all the other factors that we know are still there,” Abdolreza Abbassian, a senior economist at the FAO, said by phone.

There may be more relief in store for consumers in the medium to long term. A recent outlook from the UN and Organisation for Economic Cooperation and Development forecast slowing demand and rising output to temper food prices in the coming years. And on Thursday, the UN said it expects global grain stockpiles to rise 2.4 per cent in 2021-22, the first increase in four seasons.

Still Expensive

World food prices still remain historically high, up about 34 per cent from the same time last year. Crop prices are hinging on the weather in the months ahead to determine whether harvests in Europe and North America will be large enough to replenish strained stockpiles. Much will also depend on China’s imports in the months ahead, Abbassian said, citing a rising outlook for the country’s corn stockpiles.

Income losses during the pandemic are also exacerbating food insecurity, adding to the challenges from high prices, the World Food Programme said in a separate statement Thursday.

“We already have conflict, climate and COVID-19 working together to push more people into hunger and misery,” WFP Chief Economist Arif Husain said. “Now, food prices have joined the deadly trio.”