FAO’s May Food Price Index returns to downtrend at 124.3 points

2 Jun 2023 | Eoin Hughes

The UN Food and Agriculture Organization (FAO)'s May Food Price Index fell by 3.4 points or 2.6% from April to 124.3 points, taking it to 35.4 points or 22.1% below the all-time high of March 2022, the FAO said in a report Friday.

The report said the decline reflected significant drops in the price indices for vegetable oils, cereals and dairy, which were partly countered by rises in the sugar and meat indices.

The FAO Cereal Price Index fell by 6.5 percentage points (4.8%) to 138.6 points in May, taking it to 43.9 points or 25.3% below the levels seen in March 2022, just after Russia’s invasion of Ukraine.

The FAO said international wheat prices had fallen 3.5% month on month on “prospects for ample global supplies in the upcoming 2023/24 season and the extension of the Black Sea Grain Initiative”.

World corn prices were down 9.8% in May, with a favorable front-year outlook reflecting a rebound in global supplies with higher production in Brazil and the US expected to weigh on prices.

“A slow pace of exports by the United States of America, along with canceled purchases by China, also exerted downward pressure on world maize prices,” the report said.  

The FAO said world barley prices had also fallen by 9.5%, influenced by the decline in corn and wheat prices

The FAO’s Vegetable Oil Price Index also fell by 11.3 points or 8.7% month on month to 118.7 points in May, down as much as 48.2% below the level of a year earlier.

The FAO said the fall reflected declining prices across palm, soy, rapeseed and sunflower oils.

World soy oil prices dropped for a sixth consecutive month, under “the persistent pressure from a bumper soybean crop in Brazil and higher-than-expected stocks in the United States of America, where higher supplies of alternative feedstock partially replaced the uptake from the biodiesel industry.”

The FAO said palm oil prices internationally had fallen markedly since April as “protracted weak global import purchases coincided with expectations of rising outputs in major producing countries”.

Rapeseed and sunflower oils continued to fall from ample global supply, according to the FAO.