Food prices rose for the third consecutive month in May, bringing the Food and Agriculture Organization (FAO) food price index to 1.1 points, or 0.9%, above the April level (120.4 units).
The FAO explained that while sugar and vegetable oil prices fell and meat prices remained stable, cereals and dairy products increased, causing the index to rise.
The agency clarified that, although this is the third consecutive monthly rebound, the indicator was 3.4% lower than in May 2023 and 24.9% lower than the peak of 160.2 points. reached in March 2022.
Wheat leads grain price rise
World grain export prices rose 7.1 points, or 6.3 percent, from the previous month, with wheat leading the way. The sharp monthly increase is largely explained by growing concerns over unfavorable growing conditions for the 2024 crops, which are likely to limit yields in some of the main producing areas of major exporting countries, particularly in Europe, in North America and the Black Sea region. Additionally, damage to shipping infrastructure in the Black Sea has exacerbated price pressures.
Corn export prices also increased in May, reflecting concerns over production in Argentina (due to crop damage from the spread of a pest) and Brazil (due to unfavorable weather conditions), as well as low sales activity of farmers in Ukraine, against a backdrop of reduced supply and strong global demand.
As for other coarse grains, world prices of barley and sorghum also increased in May, as did those of rice.
Increased demand for dairy products
Dairy products, meanwhile, gained 2.3 points, or 1.8% more than in April, driven by increased demand from the retail and restaurant sectors for summer holidays in the North and market forecasts for a decline in milk production in Western Europe and Oceania.
In the meat markets, prices of poultry and beef fell and those of pork and mutton increased, leaving the monthly indicator virtually unchanged from the previous month.
Reduced vegetable oils
Regarding vegetable oils, the FAO indicates that the drop of 3.1 points is due to the decrease in palm oil prices, which more than offset the increase in soybean, rapeseed and sunflower prices. . International palm oil prices fell for the second consecutive month in May as seasonal production in major producing countries in Southeast Asia increased in the face of prolonged weakness in global import demand.
On the other hand, global soybean oil prices rebounded in May, generally supported by growing demand from the biofuel sector, especially in Brazil. Prices of sunflower and rapeseed oils also increased, mainly due to the seasonal decline in exportable supplies in the Black Sea region and the likelihood of tighter supply in the coming season.
Sugar at its lowest level since January 2023
Sugar, for its part, lost 9.5 points, or 7.5%, compared to April, thus recording three consecutive months of decline and being at its lowest level since January 2023, the good start of the new harvest season in Brazil having been strengthened by favorable weather conditions which helped improve the global supply outlook.
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