FAO Food Price Index stable in June
The FAO Meat Price Index was virtually unchanged
9 July 2024
4 minute read
By: The benchmark for world food commodity prices was unchanged in June, as increases in international quotations for vegetable oils, sugar and dairy products offset a decrease in those for cereals, the Food and Agriculture Organization of the United Nations (FAO) reported Friday.
The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.6 points in June, the same as its revised figure for May. The index is now 2.1 percent lower than its year-earlier value and 24.8 percent below its March 2022 peak.
The FAO Cereal Price Index declined by 3.0 percent in June from May, with quotations for coarse grains, wheat and rice all down, driven in part by improved production prospects in major exporting countries.
The FAO Vegetable Oil Price Index, by contrast, rose 3.1 percent from May, buoyed by reviving global import demand for palm oil and firm demand from the biofuel sector in the Americas for soy and sunflower oils.
The FAO Sugar Price Index increased by 1.9 percent from May after three consecutive monthly declines, due in large part to concerns over the likely impact of adverse weather and monsoons on production in Brazil and India.
The FAO Dairy Price Index rose by 1.2 percent, with international quotations for butter reaching a 24-month high on the back of increased global demand for near-term deliveries amidst strong retail sales, seasonally falling milk deliveries in Western Europe and low inventories in Oceania.
The FAO Meat Price Index was virtually unchanged in June, as slight increases in the world prices of ovine, pig and bovine meats nearly offset a supply-led decline in international poultry meat prices.
Global cereal output seen hitting all time high in 2024
FAO also updated its forecast for global cereal production in 2024, now pegging it at 2 854 million tonnes, a new all-time high.
The Cereal Supply and Demand Brief, also issued by FAO today, attributed its raised projections to a better harvest outlook for maize in Argentina and Brazil as well as Türkiye and Ukraine, which will offset downgrades to the outlook for Indonesia, Pakistan and several Southern African countries. The wheat production forecast has also been raised based on better prospects in Asia, notably Pakistan, which should outpace an expected decline in the Russian Federation due to inclement weather in major wheat producing areas earlier in the season. Global rice production is projected to reach a record 535.1 million tonnes.
World cereal total utilization in 2024/25 is forecast to rise to 2 856 million tonnes, up 0.5 percent from the previous year, led by rice and coarse grains.
World cereal stocks are forecast to expand by 1.3 percent in 2025, leaving the global cereal stocks-to-use ration in 2024/25 nearly unchanged at 30.8 percent.
FAO’s forecast for international trade in total cereals remains unchanged at 481 million tonnes, representing a 3.0 percent decline from 2023/24.
Conflicts, droughts, drive food insecurity
Conflicts are generating severe levels of acute food insecurity especially in Yemen, where nearly 4.6 million people in government-controlled areas were estimated to be facing high levels of acute food insecurity, and the Gaza Strip and Sudan, where populations are also facing the risk of famine, according to the latest Crop Prospects and Food Situation report, also published today.
The triannual publication by FAO’s Global Information and Early Warning System (GIEWS) offers a granular review of hunger trends in the 45 countries it identified in need of external assistance for food.
It also offers a regional breakdown of cereal production and prospects. Cereal production in Low-Income Food Deficit Countries is expected to increase in 2024, but growth is uneven around the 44-nation group.
Of particular concern is the projected almost 20 percent annual drop in total cereal production in Southern Africa in 2024, due to widespread hot and dry conditions. Import requirements for the subregion are projected to be more than double the past five-year average, assuming normal consumption levels are maintained. Zambia, usually a net exporter of maize, is forecast to import nearly one million tonnes in 2024. Although global maize suppliers are expected to be ample, most is yellow maize, while global supply of the white maize that is a staple food in Southern Africa is tight, the report noted.
