FAO: Global Food Commodity Prices Decline

The Food and Agriculture Organization of the United Nations (FAO) reported on Friday that global food commodity prices declined in May, driven by significant declines in cereals, sugar, and vegetable oils.

According to the FAO's monthly index, changes in the prices of a basket of the world's most traded food commodities averaged 127.7 points in May, down 0.8% from April.

The May reading was 6% higher year-on-year, but 20% lower than the peak reached in March 2022, following Russia's full-scale invasion of Ukraine that sparked a devastating war between two of the world's largest grain producers.

FAO said its Cereal Price Index fell 1.8% month-on-month, driven by a sharp decline in global maize prices. Strong harvests and ample supplies in Argentina and Brazil, along with expectations of a record crop in the United States, weighed on prices.

Wheat prices also declined due to improved crop conditions in the Northern Hemisphere. In contrast, rice prices rose 1.4%, supported by strong demand for aromatic varieties and currency volatility.

Also, vegetable oil prices fell 3.7% compared to April, with all major oils declining.

The FAO Sugar Price Index fell 2.6%, reflecting concerns about the global economic outlook, weak demand from the food and beverage industries, and expectations of a production recovery next season.

In a separate report on cereals, the FAO forecast a record global cereal production of 2.911 billion tonnes in 2025, up from its previous estimate of 2.848 billion tonnes and a 2.1% increase from 2024.