In June, the world price index of the United Nations food agency reached its lowest point in over two years. This decline was primarily driven by reduced prices of sugar, vegetable oils, cereals, and dairy products.
On Friday, the Food and Agriculture Organization (FAO) announced that the average value of its price index, which monitors the prices of the most commonly traded food commodities worldwide, was 122.3 points in June. This figure represents a slight decrease from the revised value of 124.0 points recorded in the previous month.
The initial May reading had been reported as 124.3.
In June, the score reached its lowest point since April 2021, indicating that the index is now 23.4% below the record high reached in March 2022, which followed the onset of Russia’s invasion of Ukraine.
According to a distinct report on the supply and demand of cereals, the FAO has projected this year’s global cereal production to be 2.819 billion tonnes. This estimate represents a slight increase from the previous month’s forecast and a 1.1% rise compared to the levels recorded in 2022.
The FAO attributed the upward revision in the forecast primarily to improved prospects for global wheat production. The forecast for wheat production has been raised by 0.9% to reach 783.3 million tonnes.
In June, the FAO’s cereal price index experienced a decline of 2.1% compared to the previous month. This decrease was observed across multiple grains, including maize, barley, sorghum, wheat, and rice, as their prices retreated.
Experiencing a decline of 2.4% compared to the previous month, the vegetable oil price index reached its lowest level since November 2020. This drop was primarily influenced by the reduced global prices of palm and sunflower oils, which outweighed the higher quotations for soy and rapeseed oil.
The sugar price index recorded a decline of 3.2% in comparison to May, marking its first decrease following four consecutive monthly increases. The primary factors contributing to this decline, as stated by the FAO, were the favorable progress of the 2023/24 sugarcane harvest in Brazil and a sluggish demand for global sugar imports.
In May, the dairy price index experienced a decline of 0.8%, whereas the meat index remained relatively stable with negligible changes.
