Global food prices fall for the first time in 12 months – FAO

Food and Agriculture Organisation (FAO) of the United Nations said global food commodity prices fell in June for the first time in 12 months, according to a benchmark United Nations report released today.

In a release on Thursday, FAO said its Food Price Index averaged 124.6 points in June 2021, down 2.5 percent from May, but still 33.9 percent higher than its level in the same period last year.

It said the decline in June marked the first drop in the Index following twelve consecutive monthly increases.

The FAO Food Price Index tracks changes in the international prices of the most globally traded food commodities.

The organisation said the drop in June reflected declines in the prices of vegetable oils, cereals, and, though more moderately, dairy products, which more than offset generally higher meat and sugar quotations.

The FAO Vegetable Oil Price Index fell by 9.8 per cent in the month, marking a four-month low. The sizeable month-on-month drop mainly reflects lower international prices of palm, soy and sunflower oils.

The FAO Cereal Price Index fell by a more moderate 2.6 per cent from May, but remained 33.8 per cent higher than its value in June 2020. International maize prices dropped by 5.0 per cent, led by falling prices in Argentina due to increased supplies from recent harvests as a result of higher-than-earlier expected yields.

International wheat prices declined slightly by 0.8 per cent in June, with a favourable global outlook supported by improved production prospects in many key producers outweighing most of the upward pressure from dry conditions affecting crops in North America.

On diary, the FAO Dairy Price Index fell by 1 per cent to 119.9 points in June. International quotations for all dairy products represented in the index fell, with butter registering the highest drop, underpinned by a fast decline in global import demand and a slight increase in inventories, especially in Europe.

The FAO Sugar Price Index moved against the overall food price trend, rising by 0.9 percent month-on-month, marking the third consecutive monthly increase and reaching a new multi-year high. Uncertainties over the impact of unfavourable weather conditions on crop yields in Brazil, the world’s largest sugar exporter, exerted upward pressure on prices.

The FAO Meat Price Index also rose by 2.1 per cent over the month of June, continuing the increases for the ninth consecutive month and placing the index 15.6 per cent above its value in the corresponding month last year, but still, 8.0 per cent below its peak reached in August 2014.