Global food prices decline in May, but rice and sugar prices rise
08 June 2023
According to the Food and Agriculture Organization of the United Nations (FAO), food commodity prices experienced a decline in May. Quotations for various cereals, vegetable oils, and dairy products significantly dropped during this period.
In May, the FAO Food Price Index averaged 124.3 points, which is a 2.6% decrease compared to April. Moreover, it stood 22.1% below the record high achieved in March 2022.
The FAO Cereal Price Index witnessed a decline of 4.8% from the previous month. This decrease was primarily driven by a 9.8% drop in global maize quotations due to favorable production expectations and sluggish import demand.
World wheat prices also experienced a decline of 3.5%, reflecting ample supplies and the recent extension of the Black Sea Grain Initiative.
In contrast, international rice prices continued to rise in May. This increase was sustained by Asian purchases and limited supplies in some exporting countries like Vietnam and Pakistan.
The FAO Vegetable Oil Price Index decreased by 8.7% and averaged 48.2% below its level from the previous year. Notably, international palm oil prices declined significantly due to weak global import purchases and increased outputs in major producing countries.
World soy oil prices fell for the sixth consecutive month due to a large soybean crop in Brazil and higher-than-expected stocks in the US. On the other hand, rapeseed and sunflower oil prices continued to decline due to abundant global supplies.
The FAO Dairy Price Index experienced a decline of 3.2% compared to April. This drop was mainly attributed to a significant decrease in international cheese prices, driven by ample export availability and high milk production in the northern hemisphere during the season.
The FAO Sugar Price Index, however, increased for the fourth consecutive month, rising by 5.5% compared to April. It reached a level nearly 31% higher than the previous year. This surge can be attributed to tighter global availability, concerns over the impact of the El Niño phenomenon on next season’s crops, and shipping delays caused by strong competition from soybean and maize in Brazil.
The FAO Meat Price Index also rose by 1.0%. This increase was primarily driven by steady high Asian import demand for poultry meat and ongoing supply constraints for bovine meat in the US.
