Global food commodity prices decline in May, driven by cereals and oils

In May, the UN's Food and Agriculture Organization reported a decrease in global food commodity prices.

This decline was primarily due to significant price reductions in cereals, sugar, and vegetable oils.

Last month, the FAO Food Price Index stood at 127.7 points, a slight decrease of 0.8% or 1.0 points from April. 

Notably, while dairy and meat prices saw increases, these were outweighed by reductions in the price indices for cereals, sugar, and vegetable oils, according to the organisation’s latest report.

The Food Price Index showed a 6% increase, equivalent to 7.2 points, compared to the previous year.

However, it is still 20.3% lower, representing a 32.6 point decrease, from its peak in March 2022, following Russia’s invasion of Ukraine. 

Cereals

In May, the FAO Cereal Price Index registered an average of 109.0 points, showing a decrease of 1.8% or 2.0 points compared to April. 

Furthermore, it fell by 8.2% or 9.7 points relative to the level observed in May 2024.

“Global maize prices declined sharply during the month, pressured by firm competition and increasing seasonal availability from ongoing harvests in Argentina and Brazil, with harvesting in both countries ahead of last year’s pace by the end of May,” the organisation said in the report. 

Prices also declined, in part due to the anticipation of a record maize harvest in the US in 2025.

Sorghum and barley, along with other coarse grains, saw a decrease in global prices. 

International wheat prices also experienced a decline, though to a lesser extent.

This moderate decrease in wheat prices was attributed to weakened global demand and favorable crop conditions in the northern hemisphere.

In contrast, May saw the FAO All Rice Price Index rise by 1.4%. This increase was fueled by robust demand for aromatic rice types and increased prices for Indica rice. 

Contributing factors included currency gains versus the US dollar in certain rice-exporting nations.

Vegetable oil

In May, the FAO Vegetable Oil Price Index stood at 152.2 points, a 3.7% or 5.8 points decrease compared to April.

However, this figure remains 19.1% higher than the level recorded a year prior.

“The continued decline reflected lower quotations for palm, rapeseed, soy, and sunflower oils,” FAO said. 

Global palm oil prices experienced a significant decrease for the second straight month, continuing to be priced lower than other comparable oils since mid-April.

South American supply increases and diminished biofuel feedstock demand, particularly in the USA, drove down global soyoil prices.

Reduced rapeseed oil costs are primarily attributed to anticipated supply increases with the upcoming European Union harvest.

Meanwhile, sunflower oil prices decreased due to diminished global import demand and reduced competitive pricing.

Meat and dairy

Beef prices hit a record high, contributing to a 1.3% increase in overall meat prices since April.

The FAO Meat Price Index averaged 124.6 points in May.

Increases were also seen for pork and sheep meat. 

Global demand and Germany's regained disease-free status drove up pig meat prices, especially German exports.

However, poultry prices fell due to excess supply from Brazil, which faced import restrictions after a bird flu outbreak.

The FAO Dairy Price Index averaged 153.5 points in May. Strong Asian demand propelled the FAO dairy price index up by 0.8%.  

Butter prices held steady at record levels, alongside increases in cheese and whole milk powder prices.

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