Behind the Decline: Unpacking May's Global Food Commodity Price Trends
In May, global food commodity prices fell, led by declines in cereal, sugar, and vegetable oil prices, according to the FAO. The FAO Food Price Index recorded a 0.8% dip, influenced by strong harvests and ample supplies. In contrast, rice prices increased, underpinned by strong demand.
In a significant shift, global food commodity prices dropped in May, primarily due to declines in cereal, sugar, and vegetable oil prices, as reported by the United Nations' Food and Agriculture Organization (FAO). The FAO Food Price Index registered an average of 127.7 points, marking a 0.8% decrease from April.
Although there's a 6% increase from last year, prices remain more than 20% lower than the March 2022 high, which occurred post-Russian invasion of Ukraine. The decline was mainly driven by a 1.8% decrease in the cereal price index, significantly impacted by substantial maize production in Argentina and Brazil, along with anticipated record harvests in the U.S.
Meanwhile, vegetable oil prices saw a 3.7% decrease, sugar prices fell by 2.6%, and the meat price index rose by 1.3%. The report also highlights an expected record global cereal production by 2025, with stocks projected to grow modestly.
(With inputs from agencies.)
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