The Food and Agriculture Organization (FAO) of the United Nations publishes an index of international food prices based on a basket of food consisting of the average of five commodity groups weighted by their average export shares. June was the first monthly decline over the last twelve months, but the trend is still upward with real food prices at the highest levels since the mid-1970's.
This will have a clear impact on purchasing power for other goods and services in less developed countries. Spikes in real food prices have been associated with increased government protests and riots.
The hope is that these increases are transitory based on current stocks to use ratios being stable, but a bad harvest this year will provide further support for price increases and food uncertainty.
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