World Food Prices Hit Two-Year Low in May

Global food prices fell to their lowest level in two years in May, with declines in vegetable oil, cereal, and dairy prices outweighing the increase in sugar and meat prices. The overall index, which tracks the prices of cereals, vegetable oils, dairy products, meat, and sugar on international markets, fell by 3.4 points to 124.3 points compared to the previous month.

This is the lowest figure since April 2021. The index is now 22 percent below the record high reached in March 2022, after the start of the Russian invasion of Ukraine.

Cereal prices fell by nearly five percent compared to the previous month due to expectations of sufficient supply and an extension of the agreement allowing shipments from Ukraine by sea. On the other hand, rice prices continued to rise in May, partly due to limited supplies in some exporting countries.

The vegetable oil price index decreased by almost nine percent, reflecting high supplies of oilseeds and weak demand for palm oil. Dairy products fell by more than three percent due to the seasonal increase in milk production in the northern hemisphere. In contrast, sugar prices rose 5.5 percent from April and recorded their fourth consecutive monthly increase.

FAO also predicted that grain production would increase by one percent this year to 2.813 billion tons, mainly due to an increase in corn harvest. Global grain stocks should increase by 1.7 percent to 873 million tons in the 2023/2024 season.