As of August 28, the S&P GSCI Agricultural Spot Index had risen for 11 consecutive days, accumulating a 13.4% increase; however, it fell back 0.74% on August 31, ending the upward trend. This round of price increases was driven by real supply. Following the attacks on Black Sea shipping routes, Russian grain is being transshipped to the Baltic Sea, but alternative routes are expected to cover only about half of the shortfall. FAO data shows that global grain prices rose 3.4% month-on-month in July, with wheat rising 5.8%; however, the composite food index only rose 0.6%, while meat and dairy products actually declined. Therefore, this is more like a leading indicator of food inflation and cannot yet prove that full-blown inflation has restarted. The key lies in how long the Black Sea disturbances last and whether the price increases can spread from wheat to oils, meat, and the retail sector.
