Food commodity prices witnessed a broad-based decline suggests the latest FAO data

Global food commodity prices experienced a broad-based decline in May, with notable drops across cereal, sugar, and vegetable oil markets according to the latest FAO data. The organization's benchmark Food Price Index fell 0.8% month-on-month to 127.7 points, though remained 6% higher than year-ago levels. Despite the monthly decrease, current prices sit more than 20% below the March 2022 peak that followed Russia's invasion of Ukraine, which disrupted global grain supplies from two of the world's key producers.
 

Commodity Group	Price Change	Key Reasons
Overall Index	-0.80%	Broad market decline
Cereals	-1.80%	Strong Americas harvest, better wheat conditions
Vegetable Oils	-3.70%	Higher SE Asia/SA production
Sugar	-2.60%	Weak demand, coming supply boost
Meat	1.30%	Beef record, Brazil poultry surplus
Dairy	0.80%	Strong Asia demand, butter highs

 

Cereal prices led the downward trend with a 1.8% monthly decline, primarily driven by falling maize prices as Argentina and Brazil reported strong harvests while the U.S. anticipated record production. Wheat prices also softened amid improved growing conditions across northern hemisphere producers. The rice market bucked the trend with a 1.4% increase, supported by strong demand for aromatic varieties and favorable currency movements.

Vegetable oil prices dropped 3.7% as all major categories saw declines. Palm oil prices weakened due to seasonal production increases across Southeast Asia, while soy oil faced pressure from expanding South American supplies and sluggish biofuel demand. Rapeseed oil prices eased with improved EU availability, and sunflower oil declined amid tepid global demand.

The sugar price index fell 2.6% on concerns about economic conditions, reduced industrial demand, and expectations for improved production next season.

Read More About Palm Oil Production Cost Reports - Get Free Sample Copy in PDF

Meat prices provided a counterpoint to the broader decline, rising 1.3% overall. Beef prices reached record levels, with pork and sheep meat also gaining, though poultry prices declined due to oversupply in Brazil following avian flu-related trade restrictions. Dairy prices increased 0.8% on strong Asian demand, with butter maintaining historic highs and cheese and milk powder prices also advancing.

In a separate assessment, the FAO projected record global cereal production of 2.911 billion metric tons for 2025, revising its previous estimate upward by 63 million tons. This anticipated 2.1% production increase over 2024 levels is expected to rebuild global cereal stocks by 1.0%, partially recovering from last year's drawdown. The improved supply outlook suggests continued price moderation may lie ahead for staple food commodities.