Global food prices increased at rapid pace in May: FAO

The Food and Agriculture Organization (FAO) of the United Nations stated that global food prices grew at their quickest monthly rate in more than a decade in May, even as world grain production is on track to set a new record high. 

In May, the FAO Food Price Index averaged 127.1 points, up 4.8 percent from April and 39.7% higher than May 2020. 

The index, which analyzes monthly changes in the worldwide prices of regularly traded food commodities, rose to its highest level since September 2011 and is just 7.6% below its all-time high in nominal terms, thanks to a spike in the international prices of vegetable oils, sugar, and cereals. 

International maize prices averaged 89.9% higher than a year ago, according to the FAO Cereal Price Index, which jumped 6% from April. However, when production projections in the United States improved, maize prices began to fall toward the end of May. 

International wheat prices fell late in the month, but averaged 6.8% higher in May than in April, while international rice prices were stable. 

The FAO Vegetable Oil Price Index increased by 7.8%, owing to higher palm, soy, and rapeseed oil prices. Palm oil prices increased due to slow production growth in Southeast Asian countries, while soy oil prices increased due to expectations of strong worldwide demand, particularly from the biodiesel sector. 

Harvest delays and concerns about reduced crop yields in Brazil, the world's largest sugar exporter, pushed up the FAO Sugar Price Index by 6.8% in April, despite significant export volumes from India helping to moderate the price rise. 

The FAO Meat Price Index rose by 2.2% in April, with quotations for all meat kinds rising due to a higher rate of import purchases by China and rising internal demand for chicken and pig meats in the major producing regions. 

The FAO Dairy Price Index increased by 1.8 percent in the month, averaging 28% higher than a year ago. Solid import demand for skim and whole milk powders drove the increase, but butter prices fell for the first time in nearly a year due to increased export supply from New Zealand. 

FAO's first prediction for world grain production in 2021, currently estimated at roughly 2,821 million tonnes, a new record and a 1.9 percent increase over 2020, led by a projected 3.7 percent yearly gain in maize output, was also announced.