The United Nations Food and Agriculture Organization (FAO) world food price index rose for the third straight month in May, after higher prices for cereals and dairy products outweighed lower prices for sugar and vegetable oils.
The organization reported – today, Friday – that its price index, which monitors changes in the prices of the most widely traded basic food commodities globally, recorded an average of 120.4 points in May, an increase of 0.9% from the revised April level.
However, the May reading was about 3.4% lower compared to the same month last year.
The index reached its lowest level in 3 years in February, with the continued decline in food prices after an unprecedented peak reached in March 2022 with the beginning of the Russian-Ukrainian war, between the two crop exporting countries.
May’s rise was supported by a 6.3% month-on-month increase in grain prices, amid growing fears of unfavorable conditions affecting the 2024 harvest in major production regions such as the Black Sea, North America and Europe.
The FAO reported that dairy prices rose 1.8% in May compared to the previous month as a result of increased demand before the summer holidays, amid concerns about a possible decline in milk production in Western Europe.
The Organization’s sugar index fell sharply by 7.5% in May from the previous month with a good start to the new harvest in Brazil, a major sugar producer.
Vegetable oil prices fell 2.4% during the month after palm oil prices fell amid rising seasonal production.
In a separate report on supply and demand, the organization expected that grain production in the 2024-2025 season would reach 2.846 billion tons, which is approximately equivalent to the record production volume for the 2023-2024 season.
However, the organization warned that “adverse weather conditions in the Black Sea region over the past period are likely to lead to a decline in global wheat production, a possibility that is not yet reflected in forecasts.”
