MercoPress. South Atlantic News Agency

FAO Food Price Index dips in May amid lower cereal, sugar and vegetable oil prices

Global maize prices declined sharply, owing to strong harvests and robust availability in Argentina and Brazil and expectations of a record crop in the United States

The benchmark of world food commodity prices dropped in May as marked declines in international quotations for maize and palm oil outweighed historically high prices for butter and bovine meat, the Food and Agriculture Organization of the United Nations (FAO) reported.

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 127.7 points in May, down 0.8% from April but remained 6% higher than a year earlier.

The FAO Cereal Price Index declined in May, down 1.8 percent from April and 8.2 percent below its May 2024 level. Global maize prices declined sharply, owing to strong harvests and robust availability in Argentina and Brazil and expectations of a record crop in the United States of America. World wheat prices edged down due to improved crop conditions in the northern hemisphere, while the FAO All-Rice Price Index increased by 1.4 percent in May, driven by firm demand for fragrant varieties, higher prices for Indica rice, and currency fluctuations.

The FAO Vegetable Oil Price Index dropped by 3.7 percent from April, with quotations down for all major oils. International palm oil prices declined markedly primarily due to seasonal output and availability increases in Southeast Asia, global soy oil prices were impacted by higher supplies in South America and subdued demand for biofuel feedstock, rapeseed oil prices eased on improved supply prospects in the European Union, while sunflower oil prices fell due to weakening global import demand and reduced price competitiveness.

The Sugar Price Index decreased by 2.6 percent in May amid concerns over the uncertain world economic outlook, possible weaker demand from the beverage and food processing industries, and expectations of a recovery in global production next season.

The Meat Price Index increased by 1.3 percent from its revised April level, as a result of higher quotations for ovine, pig and bovine meats, with the latter reaching a new historic high. By contrast, poultry meat prices declined, driven by lower quotations in Brazil, where the detection of high-pathogenicity avian influenza on a commercial farm in mid-May prompted import bans by several major importing countries, resulting in surplus supplies.

The Dairy Price Index rose by 0.8 percent in May, with strong demand from Asia keeping international butter prices at historic highs and spurring higher prices for cheese and whole milk powder.