Is food price relief on the way?

The increasing cost of food is being acutely felt across the globe, with many people struggling to make ends meet. It’s also a key driver behind a higher consumer price index (CPI), which is leading central banks like the Fed to aggressively raise interest rates.

While the US CPI is recording that food prices are up 10.9% over the past year, there are some signs that food price inflation should slow over the months ahead.

Underlying food commodity prices have been falling

In order to ascertain the likely direction of consumer food prices, we need to look at the movement in the prices of underlying food commodities. Fortunately, indexes exist that allow this job to be made much easier.

One such index is the UN FAO’s Food Price Index. This index includes price data on key agricultural commodities within the key categories of meat, dairy, cereals, oils and sugar. The overall index value combines price data across each of these categories.

Since 1991, the index has seen several major spikes & …