Rome: While prices of rice, sugar and meat rose, there were significant drops in international quotations for most cereals including wheat and maize, vegetable oils, and dairy products such as cheese last month. This made the benchmark index of international food commodity prices decline significantly in May 2023, the Food and Agriculture Organization of the United Nations (FAO) reported today.
The FAO Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 124.3 points in May, down 2.6 per cent from April and as much as 22.1 per cent below the all-time high reached in March 2022.
The FAO Cereal Price Index declined 4.8 per cent from the previous month, led by a 9.8 per cent drop in world maize quotations due to a favourable production outlook along with a sluggish import demand.
A favourable outlook for 2023/24 pointing to a rebound in global supplies, with higher production expected in Brazil and the United States of America, two major exporters, weighed on prices. A slow pace of exports by the United States of America, along with cancelled purchases by China, also exerted downward pressure on world maize prices. Among other coarse grains, world prices of barley and sorghum also declined, by 9.5 per cent and 9.7 per cent, respectively, influenced by declines in international maize and wheat prices.
World wheat prices also declined, by 3.5 per cent, reflecting ample supplies and the new extension of the Black Sea Grain Initiative. By contrast, international prices of rice continued to increase in May, sustained by Asian purchases and tighter supplies in some exporting countries, such as Viet Nam and Pakistan.
The FAO Vegetable Oil Price Index dropped by 8.7 per cent in May, averaging 48.2 per cent below its year-earlier level. International palm oil prices fell markedly from April 2023, as protracted weak global import purchases coincided with rising outputs in major producing countries. World soy oil prices fell for the sixth consecutive month amid a bumper soybean crop in Brazil and higher-than-expected stocks in the United States of America. Rapeseed and sunflower oil prices continued to decline on ample global supplies.
The FAO Dairy Price Index declined by 3.2 per cent from April, led by a steep drop in international cheese prices due mainly to ample export availabilities amid seasonally high milk production in the northern hemisphere. However, international quotations for milk powders rebounded as did those for butter.
The FAO Sugar Price Index posted its fourth consecutive monthly increase, up by 5.5 per cent from April and reaching a level nearly 31 per cent higher than a year earlier. The jump reflected tighter global availabilities, rising concerns over the impact of the El Niño phenomenon on next season’s crops, and shipping delays amid strong competition from soybean and maize in Brazil. The positive outlook for 2023 sugarcane crops in Brazil prevented larger monthly price increases, as did lower international crude oil prices.
The FAO Meat Price Index also rose in May, increasing by 1.0 per cent, driven primarily by a steady high Asian import demand for poultry meat and persistent supply tightness for bovine meat in the United States of America.
– global bihari bureau
