Global food prices have risen for the third consecutive month, led by significant increases in the costs of cereals and dairy products, while sugar and vegetable oil prices have seen declines.
According to the Food and Agriculture Organization of the United Nations (FAO), its Food Price Index, which tracks the most globally traded food commodities, averaged 120.4 points in May, up 0.9% from the revised level in April.
Dairy prices climbed by 1.8% from April to May due to heightened demand ahead of the summer holidays and worries that milk production in Western Europe could fall
The increase was driven by a sharp 6.3% month-on-month rise in cereal prices amid growing concerns over unfavorable crop conditions affecting the 2024 harvests in key producing regions including North America, Europe, and the Black Sea region.
In its separate Cereal Supply and Demand Brief, the FAO projected global cereal production for the 2024/25 season at 2.846 billion metric tons, roughly on par with the record levels of the 2023/24 season. This forecast is underpinned by expected increases in barley, rice, and sorghum production, which are set to offset declines in corn and wheat.
However, the FAO has warned that recent adverse weather in the Black Sea region is likely to reduce global wheat production, a factor not yet reflected in the forecast. Additionally, world cereal usage is expected to hit a new record of 2.851 billion tons in 2024/25, up 0.5% year-on-year, leading to an anticipated 1.5% increase in global cereal stocks to a record 897 million tons.
