FAO Food Price Index Rises in May Despite Sugar and Vegetable Oil Price Declines

FAO Food Price Index Rises in May Despite Sugar and Vegetable Oil Price Declines

Mintec Global
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Overall Increase in FAO Food Price Index

In May 2024, the FAO(Food and Agriculture Organization of the United Nations) Food Price Index (FFPI) reached 120.4 points, marking a 0.9% increase from April. This rise was driven primarily by higher cereal and dairy prices, which offset declines in sugar and vegetable oil prices. Despite this being the third consecutive month of growth, the FFPI remains 3.4% lower than in May 2023 and 24.9% below its peak in March 2022.

Cereal Price Surge

The FAO Cereal Price Index averaged 118.7 points in May, up 6.3% from April but still 8.2% lower than the same month last year. World export prices for cereals, particularly wheat, rose due to unfavorable weather conditions in major exporting countries and damage to port infrastructure in the Black Sea region.

Vegetable Oil Prices Decrease

The FAO Vegetable Oil Price Index stood at 127.8 points in May, down 2.4% from the previous month but 7.7% higher than in May 2023. This decrease was primarily due to falling palm oil prices, which counterbalanced increases in soybean, rapeseed, and sunflower oil prices.

Dairy Prices Continue to Climb

The FAO Dairy Price Index reached 126.0 points in May, a 1.8% increase from April and 3.5% higher than in May 2023. The price rise was attributed to increasing demand and an anticipated reduction in milk production in Western Europe and Oceania.

Stable Meat Prices

The FAO Meat Price Index in May was 116.6 points, slightly down by 0.2% from April and 1.3% lower than in May 2023. Prices for poultry and beef fell, while prices for pork and lamb saw an increase.

Significant Drop in Sugar Prices

The FAO Sugar Price Index fell to 117.1 points in May, a 7.5% decrease from April. This decline was driven by a successful start to the new harvest season in Brazil and an increased export supply.

The mixed trends in the FAO Food Price Index highlight the complex dynamics of global food markets. While rising cereal and dairy prices have driven the overall index upward, declines in sugar and vegetable oil prices reflect regional production successes and shifting demand patterns. Stakeholders should continue to monitor these trends to adapt to the evolving market conditions effectively.