• Friday, September 29, 2023
businessday logo


Global food prices hit 2yr low in May

The global food price index has declined to the lowest in two years, as sharp fall in the prices of vegetable oils and cereals outweigh the rise in sugar and others in May, the UN Food Agency said.

The index in May averaged 124.3 points, a 2.6 percent decrease from April and as much as a 22.1 percent decline (35.4 points) below the all-time high reached in March 2022.

“Significant drops in the price of cereals, vegetable oils and dairy products led to a 2.6 percent month-on-month decline in May, the Food and Agricultural Organisation (FAO) says in its May report, however, the cost of meat, sugar and rice rose still, during the month.

Grains and cereals, the largest component in the index, was down 4.8 percent from the previous month, led by a 9.8 percent drop in world maize quotations due to a favourable production outlook alongside a sluggish import demand.

Global wheat prices also declined by 3.5 percent, “reflecting ample supplies and the new extension of the Black Sea Grain Initiative,” the report states.

“By contrast,” the FAO adds, “international prices of rice continued to increase in May, sustained by Asian purchases and tighter supplies in some exporting countries, such as Viet Nam and Pakistan.”

Read also: April food prices rise most in Kogi, Kwara, Bayelsa

The vegetable oil price index dropped by 8.7 percent in May, averaging 48.2 percent below its year-earlier level.

“International palm oil prices fell markedly from April, as protracted weak global import purchases coincided with rising outputs in major producing countries,” the FAO says.

Soyoil prices fell for the sixth consecutive month amid a bumper soybean crop in Brazil and higher-than-expected stocks in the United States of America. Rapeseed and sunflower oil prices continued to decline on ample global supplies.

The main exceptions to the trend were; Sugar prices, which climbed for a fourth straight month, rising 5.5 percent from April and up 31 percent from May 2022.

“The jump reflected tighter global availability, rising concerns over the impact of the El Niño phenomenon on next season’s crops, and shipping delays amid strong competition from soybean and maize in Brazil.”

The meat price index also rose in May, increasing by 1.0 percent, “driven primarily by a steady high Asian import demand for poultry meat and persistent supply tightness for bovine meat in the United States of America.”

The index has been falling since January this year, until prices rose in April for the first time, amid increases in world quotations for sugar, meat, and rice.