World food prices dip in May as cereal, sugar and veg oils drop

Global food commodity prices declined in May, driven by marked drops in cereal, sugar, and vegetable oil prices, the United Nations' Food and Agriculture Organisation (FAO) said.

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The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 127.7 points in May, reflecting a 0.8 per cent decrease from the April figure.

The May reading was up 6 per cent from a year earlier but over 20 per cent below a March 2022 peak following Russia's full-scale invasion of Ukraine that started a devastating war between two of the world’s leading grains producers.

The FAO cereal price index fell 1.8 per cent month-on-month, led by a sharp drop in global maize prices. Strong harvests and ample supplies in Argentina and Brazil, along with expectations of a record crop in the United States, weighed on prices.

Wheat prices edged lower due to improved crop conditions in the northern hemisphere.

By contrast, rice prices rose 1.4 per cent, supported by firm demand for fragrant varieties and currency movements.

Vegetable oil prices declined 3.7 per cent from April, with declines across all major oils. Palm oil prices fell due to seasonal output increases in Southeast Asia. Soy oil prices dropped on higher South American supplies and weak demand for biofuel.

Rapeseed oil eased on improved European Union supply prospects, while sunflower oil declined amid weak global demand.