Food Price Index Edges Down
The Food and Agriculture Organization of the United Nations (FAO) released the global food price index data for June. The index fell 0.3 percent month-on-month to 130.3 points, as declines in sugar, cereals and dairy products offset increases in vegetable oil and meat prices.
On an annual basis, the index rose 2.2 percent.
Cereal Prices Continue to Decline
The FAO Cereal Price Index fell 3.5 percent in June compared to the previous month. On an annual basis, it remained 2.9 percent higher.
The 4.4 percent decline in global wheat prices was driven by the acceleration of harvests in the Black Sea basin and a stronger supply outlook. Expectations of increased trade flows through the Strait of Hormuz also weighed on prices.
Vegetable Oil Index Rises
The Vegetable Oil Price Index rose 3.8 percent month-on-month to 192 points. On an annual basis, it posted a 23.3 percent increase. Although soybean oil prices declined, a sharp rise in palm oil lifted the index.
Meat Prices Hit Record
The Meat Price Index reached 131 points in June, up 0.4 percent month-on-month and 4 percent year-on-year, setting a new record. The increase in international poultry meat prices was the decisive factor behind this rise.
Declines in Dairy and Sugar
The Dairy Price Index fell 1.5 percent month-on-month and 24.5 percent year-on-year to 117.4 points. Prices declined across all dairy products, while underlying market conditions continued to vary across product groups.
The Sugar Price Index fell 5.7 percent month-on-month and 13.3 percent year-on-year to 89.7 points. Domestic ethanol prices in Brazil falling for the third consecutive time led to more sugarcane being diverted to sugar production, contributing to the decline in international sugar prices.
Cereal Production Outlook
FAO expects this year’s global cereal production to reach 2,983 million tonnes, the second highest level on record. That figure would be 1.9 percent below the record set last year. Stronger harvest expectations in Argentina, Brazil, China and Zambia pushed production estimates higher.
The world cereal utilization forecast for 2026/27 was lowered to 2,961 million tonnes due to an expected decline in wheat use.
Global wheat production is forecast to fall 4.3 percent to 806.5 million tonnes. In Australia, output fell below the five-year average due to the impact of El Niño. World rice production is expected to decline 1.8 percent from the record level of 2025-26.
41 Countries Require Food Assistance
According to FAO, 41 countries and territories worldwide require external food assistance. Thirty-one of these are in Africa. Conflict and insecurity remain the primary drivers of the most severe levels of acute food insecurity. Weather events linked to El Niño and high input prices are constraining agricultural production in East and West Africa.
Total cereal production in the 39 low-income food-deficit countries is estimated to rise 1.4 percent to 129 million tonnes in the 2026/27 season. However, their import requirements are expected to increase 2 percent to approximately 48 million tonnes.
