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Global Food Prices Rise for Third Consecutive Month

8 Jun 2024 1:09 pm
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MUMBAI, 9 Jun (Commoditiescontrol): The Food and Agriculture Organization of the United Nations (FAO) reported on Friday that global food commodity prices rose for the third consecutive month in May. This uptick was primarily driven by higher prices for dairy products and cereals, which offset reductions in sugar and vegetable oil prices.

The FAO Food Price Index, which tracks monthly changes in international food commodity prices, averaged 120.4 points in May, reflecting a 0.9% increase from the revised April figure. Despite this rise, the index was still 3.4% lower than the same month last year and 24.9% below the peak recorded in March 2022.

Cereal Prices Surge

The FAO Cereal Price Index saw a significant 6.3% increase from April, spurred by rising wheat export prices. Concerns over unfavorable crop conditions in major producing regions, including Northern America, Europe, and the Black Sea area, have led to fears of reduced yields for the 2024 harvest. Additionally, challenging weather conditions in Brazil and the impact of Spiroplasma disease (corn stunt disease) in Argentina, along with low selling activity in Ukraine and ripple effects from the wheat markets, contributed to the rise in maize export prices. The FAO Rice Price Index also edged up by 1.3% in May.

Dairy Prices Climb

In anticipation of the summer holiday season, there was increased demand in the retail and food services sectors, which, coupled with expectations of reduced milk production in Western Europe, led to a 1.8% rise in the FAO Dairy Price Index from April. Renewed demand for spot supplies from North Africa and the Near East further pushed up dairy prices.

Sugar Prices Decline

Conversely, the FAO Sugar Price Index fell by 7.5% in May, influenced by the promising start of Brazil's new harvest season. Reduced global crude oil prices and decreased sugar demand exerted additional downward pressure on sugar prices.

Vegetable Oil Prices Fall

The FAO Vegetable Oil Price Index decreased by 2.4% in May. This decline was driven by seasonal production increases and sustained low global demand for palm oil, which offset rising soy oil prices due to growing biofuel industry demand and increased prices for rapeseed and sunflower oils resulting from diminished export opportunities in the Black Sea region.

Overall, the FAO's report underscores the dynamic nature of global food commodity prices, with significant variations across different sectors. As global markets respond to a range of factors, from weather conditions to geopolitical tensions, these fluctuations are likely to continue impacting food prices worldwide.

(By Commoditiescontrol Bureau; +91 98201 3018)


       
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