World Food Prices See Small Drop in May
PARIS – According to the United Nations Food and Agriculture Organization (FAO), global food prices dipped in May compared to the revised figures from April. This marks the first decline in vegetable oil prices this year, although prices for cereals and sugar increased.
The FAO Food Price Index, which tracks the price changes of a variety of food products traded worldwide, averaged 130.8 points in May. This represents a slight decrease of 0.2% from April’s 131.0, but it remains 2.9% higher than the same time last year.
Even with this small drop, the index is close to its highest levels since January 2023 and is still 18.4% lower than the peak reached in March 2022.
Cereal prices rose by more than 2.6% in May. Wheat prices increased for the fourth month in a row due to expectations of smaller harvests for exports, particularly in the U.S., and rising fuel and fertilizer costs, influenced by tensions in Iran. Similarly, maize prices are being supported by stronger demand for imports and limited supplies from Brazil and the U.S.
On the other hand, vegetable oil prices fell by 4.6% from April, marking the first decline this year. The drop was influenced by decreasing prices for palm and soy oil, which overshadowed increases in rapeseed and sunflower oil. After five months of rising costs, international palm oil prices softened, driven by expectations of lower global import demand and uncertainties in the crude oil market.
Despite this month’s decrease, vegetable oil prices remain over 20% higher than last year, influenced by high energy costs and increased demand for biofuels made from organic materials due to the partial closure of the Strait of Hormuz.
In the sugar market, prices rose sharply by 7.5% to 95.1 points, although they are still 13.1% lower than last year. This rise is largely due to concerns about a potential tightening of global sugar supplies in the near future.
In a related report, the FAO projected a 2% decline in world cereal production—including rice—in the 2026/27 season, estimating a total of 2.98 billion tons. They expect production across all major cereals to decrease, with the largest drops anticipated in wheat and smaller declines expected for maize and barley.
(Reporting by Sybille de La Hamaide; Editing by Emelia Sithole-Matarise)
