FAO: World food prices decreased in May

The Food and Agriculture Organization of the United Nations (FAO) announced that the prices of global food commodities decreased in May, in light of the decline in the prices of grains, sugar and vegetable oils, despite their continued rise on an annual basis compared to last year.

The FAO Food Prices, which follows monthly the prices of the most frequently traded food commodities at the global level, scored a reading of 127.7 points in May, down 0.8 percent compared to April.

Despite this monthly decrease, Mayo’s reading remains about 6 percent higher compared to the same month of the year 2023, but it is still 20 percent less than the peak that the index reached in March 2022, after the outbreak of the Russian -Ukrainian war, which caused great turmoil in the global grain markets, as Russia and Ukraine are senior wheat and corn suppliers and sunflower oil.

The grains lead the decline amid the abundance of production

The FAO said that the grain index decreased by 1.8 percent on a monthly basis, as a result of low global corn prices.

The abundance of production in South America, especially from Argentina and Brazil, in addition to expectations of a record crop of the atom in the United States, has contributed to prices to decline.

The prices of wheat also declined due to the improvement of crop conditions in a number of countries producing in the northern hemisphere, especially in Europe and the United States, which led to the decline in fears associated with supplies in the short term.

On the other hand, rice prices increased by 1.4 percent during the same period, with the support of strong demand for aromatic varieties and currency rate fluctuations in some importing countries.

Vegetable oil prices recorded a decline of 3.7 percent compared to April, in light of the decrease in all types of major oils, including palm oil, soybeans, turnip seeds and sunflower.

Al -Faw stated that the abundance of supplies from Southeast Asia and the slowdown in industrial demand helps in this decrease, which is in line with a previous report issued by the Malaysian Palm Oil Council, indicating the increase in stocks by 5 percent in May.

As for the sugar price index, it decreased by 2.6 percent, with weak demand from the food and beverage sectors, in addition to the optimism of the markets to recover production in the next season, especially in Brazil and India, the largest sugar producers in the world.

Standard production expectations for grains in 2025

In a separate report, Al -Faw expected that global production of grains in 2025 would reach about 2.911 billion tons, compared to previous estimates of 2.848 billion tons, which represents an increase of 2.1 percent over the production of 2024.

The organization said that this increase is due to the expected expansion of the production of coarse grains, especially corn, supported by the improvement of climatic conditions in the main agricultural regions around the world.

Since the beginning of the war in Ukraine in February 2022, global agricultural markets have witnessed significant turmoil, as food prices have increased to unprecedented levels due to supplies and freight chains, especially in grains and vegetable oils.

According to a joint report from the World Bank and the International Monetary Fund, this contributed to high food inflation rates in more than 80 countries around the world.

Despite the current decline in prices, international organizations such as the World Food Program warns that food security is still threatened in many regions, as a result of high costs and a lack of purchasing power in developing countries.