FAO: Global food prices fall again in June
11 July 2023
The FAO Food Price Index continued declining in June. This was led by price decreases for all major cereals and most types of vegetable oils, according to the Food and Agriculture Organization of the United Nations (FAO).
Continuing the downward trend, the FAO Food Price Index averaged 122.3 points in June, down 1.4% from May and 23.4% from the peak it reached in March 2022.
The FAO Cereal Price Index declined 2.1% from May. International coarse grain quotations in June decreased by 3.4%, driven mostly by increased maize supplies from ongoing harvests in Argentina and Brazil and improved output prospects in key producing areas of the US.
International wheat prices dropped by 1.3% as harvests began in the Northern Hemisphere, influenced by ample supplies and a lower export tax in Russia, along with improved conditions in the US. International rice prices declined by 1.2% amid subdued demand for non-Indica varieties and efforts by Pakistan to attract export sales.
The FAO Vegetable Oil Price Index declined by 2.4% from May, as lower world prices of palm and sunflower oils more than offset increases in quotations for soy and rapeseed oil, influenced by weather conditions in major growing regions.
The FAO Dairy Price Index declined by 0.8% in June, led by lower international cheese prices, even as world butter prices rose, driven by active demand for spot supplies, mainly from the Middle East.
As far as sugar is concerned, the FAO Sugar Price Index declined by 3.2%, its first drop after four consecutive monthly increases, mainly triggered by good progress of the sugarcane harvest in Brazil and sluggish global import demand, particularly from China.
According to the predictions of the latest Cereal Supply and Demand Brief, world cereal production is expected to hit a record high in 2023/24. FAO raised its 2023 global cereal production forecast to 2 819 million tons, indicating a 1.1% increase from the previous year.
However, global wheat production still falls below last season’s output by 2.3%. Global coarse grain output for the year is forecasted to grow by 2.9% from 2022 to 1,512 million tons. Likewise, world rice production in 2023/24 is expected to rise 1.2% above the 2022/23 reduced level to 523.7 million tons.
