Global food prices dip in June as cereal and sugar markets soften

Global food commodity prices edged down in June 2026. Declines in cereals, sugar, and dairy outweighed increases in vegetable oils and meat, according to new data released by the UN FAO. The FAO Food Price Index averaged 130.3 points in June, representing a 0.3% decrease from May, although it remains 2.2 points (or 1.7%) higher than in June 2025.

FAO notes that price movements across commodity groups continued to diverge, reflecting a range of shifting supply and demand conditions. 

“While the overall benchmark for international food commodity prices declined slightly in June, individual commodity markets continue to respond differently to evolving factors,” says Boubaker Ben-Belhassen, director of FAO’s Markets and Trade division. He adds that in an uncertain global environment, transparent markets and reliable trade flows remain essential for global food security.

Cereal prices fall on strong supply outlook

The FAO Cereal Price Index dropped 3.5% from May, led by lower wheat and maize prices. Despite the monthly decline, it remained 2.7% higher than a year earlier.

Wheat prices fell by 4.4%, supported by rapid harvest progress and strong supply expectations in the Black Sea region. These downward pressures outweighed concerns about production prospects in countries such as Australia and the US.

Additional softness came from a stronger US dollar and weaker energy markets, linked to expectations of reduced geopolitical tensions around the Strait of Hormuz.

Maize prices declined by 6.2%, reflecting expectations of abundant harvests in key South American exporting countries and weaker demand from the ethanol sector. In contrast, rice prices moved higher, with the FAO All Rice Price Index rising by 3.2%. 

Stronger demand for Indica rice in parts of Asia, combined with weather-related concerns and higher production and transport costs, supported the increase.

Vegetable oils and meat rise, dairy and sugar fall

The FAO Vegetable Oil Price Index increased by 3.8% in June. Higher palm and rapeseed oil prices, supported by stronger biofuel demand mandates, outweighed declines in soybean oil quotations. Sunflower oil prices remained broadly stable.

Meat prices also edged up, with the FAO Meat Price Index rising 0.5 points (or 0.4%) to a new record level. Poultry meat prices increased due to tighter domestic availability in some producing countries following production adjustments. However, pig and bovine meat prices weakened over the month.

By contrast, dairy prices fell by 1.5% with lower quotations for skim milk powder, whole milk powder, and butter contributing to the decline, alongside continued downward pressure on cheese prices. 

The FAO Dairy Price Index has now recorded eleven consecutive monthly decreases in cheese prices, reflecting export supplies that continue to exceed import demand.

Sugar prices also declined sharply, with the FAO Sugar Price Index down 5.7% from May. The drop was driven by lower ethanol prices in Brazil and a depreciation of the Brazilian real. 

However, concerns over potential weather impacts linked to El Niño conditions in major producing countries, such as India and Thailand, limited the overall decline.

Cereal outlook strong despite weather risks

Alongside the price update, FAO released its latest Cereal Supply and Demand Brief, which provides updated forecasts for global production in 2026. World cereal output is now projected to reach 2,983 million tons, the second-highest level on record, though 1.9% below the previous year’s peak.

Coarse grain output is expected to stay broadly stable, with stronger harvests in Argentina, Brazil, mainland China, and Zambia offsetting weaker prospects elsewhere.

Wheat production is forecast to fall 4.3% to 806.5 million tons due to El Niño impacts in Australia, while rice output is set to decline 1.8% from last year’s record.