Global Food Prices Continue Upward Trend in May – FAO

By Roger A. Agana 

June 8, 2024

Global food prices rose for the third consecutive month in May, according to the United Nations Food and Agriculture Organization (FAO) report released on Friday.

The primary drivers behind the rising global food prices were the increased costs of grains and cereals, which are the largest components of the FAO Food Price Index.

The FAO noted that global food prices had been declining for 19 of the previous 21 months, only beginning to rise again in March.

In May, the comprehensive FAO Food Price Index rose by 0.9 percent compared to the previous month. Despite this increase, the index was still 3.4 percent lower than in May 2023 and 24.9 percent below its all-time high in March 2022, when global prices surged following the onset of the conflict between Russia and Ukraine.

Grain and cereal prices increased by 6.3 percent in May, though they remained 8.2 percent below the levels from a year earlier. The FAO attributed this increase to concerns about potential poor harvests later in the year in Europe, North America, and the Black Sea region, where agricultural areas are under pressure due to the ongoing crisis in Ukraine.

Rice prices rose by 1.3 percent in May, driven by increased demand in Indonesia and Brazil.

Dairy prices also saw an increase, climbing by 1.8 percent, as milk production in Western Europe fell below historical norms, and concerns grew about potential weak production in Oceania. With these gains, dairy prices were 3.5 percent higher than their levels a year ago.

Conversely, sugar prices dropped by 7.5 percent in May and were 25.5 percent below their levels from a year earlier. This decline was attributed to strong harvest projections in Brazil, the world’s largest sugar producer.

Vegetable oil prices fell by 2.4 percent, although they remained 7.7 percent higher than in May 2023. The FAO reported that demand for vegetable oils had decreased while production in Asia had improved.

Meanwhile, meat prices remained relatively stable, slipping just 0.2 percent as strong exports of most meat types balanced out rising demand.