Recent FAO data indicate that world food prices have fallen for two months in a row, a trend seen in many countries.
In the United States, the price of food is down by about 2%. In the United Kingdom, the price of food has fallen by about 3.5%.
In Europe, the price of food is down by about 5%. In Brazil, the price of food is down by about 10%. In Nigeria, the price of food is down by about 10%.
FAO World Food Prices Index
According to the Food and Agriculture Organization of the United Nations (FAO), as reported in the FAO food price index, (FFPI), food prices have fallen for the 2nd consecutive month in May.
Oilseed prices, including palm oil, sunflower oil, soy oil, and rapeseed oil, dropped for the second month in a row in May.
It attributed this to the decline in the prices of both refined and non-refined oil.
The decrease in dairy prices was not as significant. The sugar price index declined for the third time in four months. The price of most food commodities is historically low.
The Food and Agriculture Organization’s (FAO) Vegetable Oil Price Index averaged 2.3 points in May, down 3.5% month-on-month and marking its best annual performance since.
The price of palm oil and vegetable oil oils averaged the lowest values on record. In the May report, the removal of the Indonesian export ban also affected oil prices.
This meant there was less competition for palm oil. As a result, palm oil prices weakened, as buyers looked to sell the product at lower prices.
The world dairy price fell in May and is expected to fall in the coming months. Milk prices in Argentina, Brazil, and the US are $2.15 per 100 kg, $3.66 per 100 kg, and $4.30 per 100 kg.
Prices of various milk products have experienced a downward trend, with powdered milk witnessing the most significant decline.
This drop in demand can be attributed to the ongoing lockdown in China, which has resulted in decreased buying activity.
Butter prices have dropped due to lower import demand, increased supplies from Oceania, and limited sales within Europe.
International sugar prices fell for the first time in May due to low global import demand and abundant supply forecasts.
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| Infographics: World Food Situation; FAO Food Price Index. 03/06/2022 |
The May cereal prices are up 2.5%
The May wheat price is up by 3.5%. The May corn price is up 4.9%. The May soybean price is up by 5.8%. The May soybean meal price is up 6.6 percent. The May sorghum prices are up 7.8%. The May canola price is down 8.2 percent.
The US corn yield is projected at 2.4 bushels per acre (3.94 t/ha), down 4% from last year and 5.3% from the five-year average.
Great news! The USDA predicts an astonishing 6.1% surge in global production this year, amounting to an incredible 7.8 million tons.
The report states that the harvest of sorghum in Argentina and maize in Brazil has begun, and increased export demand from the U.S. and China is likely to raise prices.
The report predicts an 8.5% decrease in the maize harvest in the European Union this year.
Conversely, there is a slight improvement expected in the wheat, soft wheat, and barley crops in the United Kingdom.
The price index for May was up a robust 2.5% from last month. Pork prices were down a strong 3.9%, while lamb, chicken, and beef prices were also all down, on average.
For the third consecutive month, the index has achieved an impressive record high.
This remarkable milestone can be primarily attributed to the significant surge in poultry prices, which highlights the supply chain disruptions occurring in Ukraine, coupled with the growing demand in Europe.
Forecast.
The UN’s Food and Agriculture Organization predicts the first contraction in global cereal utilization in two decades.
It anticipates a decline of approximately 0.1%, translating to a decrease from 21 to 22 billion metric tons over the next twenty years.
Less cereal is being used as animal feed, despite predictions of increased consumption due to population growth.
We expect the international trade of rice to remain positive, despite a decline in world trade in cereals.
Inventories will keep falling, leading to the world’s cereal stocks-to-use ratio dropping to 2.6% in 2022/23 from 3.5% in 2021.
The world cereal stock-to-use ratio is projected to fall to a three-year low of 5.6% in 2022 due to decreased inventories.
Conclusion
Recent global drops in vegetable oil and sugar prices provide some relief, but rising cereal costs and decreasing stock reserves still raise food security concerns. We’re seeing some positive changes, but long-term stability requires continued vigilance and action.
