Rome, June 2, 2023 – The Food and Agriculture Organization of the United Nations (FAO) has released its global food price index for May, revealing a significant decline to a two-year low. The drop in prices was primarily driven by decreases in vegetable oil, grains, and milk, although sugar and meat prices experienced an increase.
The global food price index for May averaged 124.3 points, representing a notable decrease from April’s 127.7 points. This figure has been adjusted from the original level of 127.2 points.
The food price index reaching its lowest level since April 2021 indicates that it is currently 22% below its high in March 2022, which coincided with Russia’s invasion of Ukraine and the subsequent geopolitical tensions.
The Grain Price Index experienced a decline of almost 5% in May compared to the previous month. This drop can be attributed to significant supply expectations and the extension of an agreement allowing grain exports through the Black Sea route. This development provides Ukraine with an additional channel for exporting its grain.
However, International rice prices continued to rise in May, partly due to tighter supplies in certain exporting countries. The FAO had previously expressed concerns about the soaring prices of rice.
The Vegetable Oil Price Index witnessed a substantial month-on-month decrease of nearly 9%. This decline can be attributed to the abundant supply of oilseeds and weakened demand for palm oil. Meanwhile, global milk prices fell by over 3%, largely influenced by the seasonal increase in dairy production in the northern hemisphere.
On the contrary, sugar prices rose by 5.5% in May compared to April. This marks the fourth consecutive month of price increases, driven by concerns regarding the El Niño phenomenon and its impact on global supply risks.