Food Price Index Sees Slight Decline
The United Nations Food and Agriculture Organization (FAO) released its 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 rises in vegetable oil and meat prices.
Year-on-year, the index rose 2.2 percent.
Cereal Prices Continued to Fall
The FAO Cereal Price Index fell 3.5 percent in June from the previous month. It remained 2.9 percent higher year-on-year.
Global wheat prices dropped 4.4 percent, driven by the accelerating harvest in the Black Sea basin and an improving supply outlook. Expectations of increased trade flows through the Strait of Hormuz also pushed prices lower.
Vegetable Oil Index Rose
The Vegetable Oil Index climbed 3.8 percent month-on-month to 192 points. Year-on-year, it posted a 23.3 percent increase. While soy oil prices edged lower, a sharp rise in palm oil lifted the index.
Meat Prices Hit a Record
The Meat Price Index rose 0.4 percent month-on-month and 4 percent year-on-year in June, reaching 131 points and setting a new record. The rise was mainly driven by higher international poultry meat prices.
Dairy and Sugar Declined
The Dairy Price Index fell 1.5 percent month-on-month and 24.5 percent year-on-year to 117.4 points. Prices dropped across all dairy products, while underlying market conditions continued to diverge among product groups.
The Sugar Price Index fell 5.7 percent month-on-month and 13.3 percent year-on-year to 89.7 points. A third consecutive drop in domestic ethanol prices in Brazil prompted mills to divert more sugarcane to sugar production, contributing to the decline in international sugar prices.
Cereal Production Outlook
FAO expects global cereal production this year to reach 2.983 billion tonnes, the second highest level on record. This is 1.9 percent below last year’s record. Stronger harvest prospects in Argentina, Brazil, China and Zambia have raised production estimates.
The forecast for world cereal utilization in 2026/27 has been lowered to 2.961 billion tonnes, due to an expected drop in wheat use.
Global wheat production is projected to fall 4.3 percent to 806.5 million tonnes. In Australia, El Niño pushed output below the five-year average. World rice production is expected to drop 1.8 percent compared with the record level in 2025-26.
41 Countries Need Food Aid
According to FAO, 41 countries and territories worldwide need external food assistance. Thirty-one of these are in Africa. Conflict and insecurity remain the main drivers of the most severe levels of acute food insecurity. El Niño‑related weather events and high input prices are constraining agricultural production in East and West Africa.
Total cereal production in 39 low-income food-deficit countries is forecast 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 around 48 million tonnes.
