GLOBAL – Global food commodity prices increased for the third consecutive month in May, driven largely by significant hikes in the prices of cereals and dairy products, according to the FAO Food Price Index.
The Index, which monitors monthly changes in the international prices of a basket of globally traded food commodities, rose by 0.9% compared to April, reaching 120.4 points.
Despite this rise, the index remained 3.4% below its level from the same period last year and 24.9% below its peak in March 2022, according to the United Nations’ Food and Agriculture Organization (FAO).
The cereal price index saw a notable surge of 6.3% from April. This increase was attributed to rising global wheat export prices, driven by growing concerns about unfavorable crop conditions that are expected to reduce yields for the 2024 harvests in key producing regions, including parts of North America, Europe, and the Black Sea region.
Additionally, maize export prices climbed in May due to production issues in Argentina and adverse weather conditions in Brazil. Despite the monthly increase, the cereal price index was still 8.2% lower than its value in May 2023.
Dairy products also contributed to the overall rise in food prices, with the dairy price index climbing by 1.8%. The FAO noted that international price quotations for all dairy products included in the index rose in May.
In contrast, other food commodities saw price decreases. The sugar price index dropped by 7.5% from April, primarily due to a strong start to the new harvest season in Brazil and lower international crude oil prices, which reduced demand.
Vegetable oil prices fell by 2.4%, driven by declining palm oil quotations. The meat price index experienced a slight decrease of 0.2%, with falling international prices for poultry and bovine meats outweighing increases in pig and ovine meat prices.
The fluctuations in meat prices were particularly noteworthy, as rising prices for poultry, bovine, and ovine meats had previously driven up the overall FAO basket of food commodities in April.
The FAO cited “slack internal demand” in Western Europe and “persistently lacklustre demand from leading importers,” especially China, as key factors influencing these trends.
Overall, the rise in cereal and dairy prices highlights ongoing volatility in global food markets, influenced by various factors including weather conditions, crop yields, and international demand.
As these dynamics continue to unfold, stakeholders across the agricultural and food sectors will closely monitor developments in the months ahead.
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