World food prices fall to two year low but rice, sugar and meat prices rise

02 Jun 2023 --- Food commodity prices declined in May amid significant drops in quotations for most cereals, vegetable oils and dairy products, reports the Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index averaged 124.3 points in May, down 2.6% from April and 22.1% below the all-time high reached in March 2022. 

The FAO Cereal Price Index declined 4.8% from the previous month, led by a 9.8% drop in world maize quotations due to a favorable production outlook and sluggish import demand. 

Grain deal pushes down prices
World wheat prices also declined, by 3.5%, reflecting ample supplies and the new extension of the Black Sea Grain Initiative. 

In contrast, international rice prices continued to increase in May, sustained by Asian purchases and tighter supplies in some exporting countries, such as Vietnam and Pakistan. 

The FAO Vegetable Oil Price Index dropped 8.7%, averaging 48.2% below its year-earlier level. International palm oil prices fell markedly from April, as protracted weak global import purchases coincided with rising outputs in major producing countries. 

World soy oil prices fell for the sixth month amid a bumper soybean crop in Brazil and higher-than-expected stocks in the US. Meanwhile, rapeseed and sunflower oil prices continued to decline on ample global supplies.

The FAO Dairy Price Index declined by 3.2% from April, led by a steep drop in international cheese prices due mainly to ample export availability amid seasonally high milk production in the northern hemisphere. 

The FAO Sugar Price Index posted its fourth consecutive monthly increase, up by 5.5% from April and reaching a level nearly 31% higher than a year earlier. The jump reflected tighter global availability, rising concerns over the impact of the El Niño phenomenon on next season’s crops, and shipping delays amid strong competition from soybean and maize in Brazil. 

The FAO Meat Price Index also rose by 1.0%, driven primarily by a steady high Asian import demand for poultry meat and persistent supply tightness for bovine meat in the US.

Edited by Gaynor Selby