Global food prices fall for first time in 1 year

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 124.6 points in June 2021, down 2.5% from May, but still 33.9% higher than its level in June 2020. The drop in June reflected declines in the prices of vegetable oils, cereals and, to a lesser degree, dairy prices, which more than offset generally higher meat and sugar quotations.

The Cereal Price Index averaged 129.4 points in June, down 2.6% from May but still 33.8%above its June 2020 value. After reaching their highest level in May since January 2013, international maize prices dropped by 5% in June, yet remained over 72% higher than in the same period last year. International barley and sorghum prices also softened in June, falling by 2.2% and 4.9%, respectively. International wheat prices declined slightly in June but remained above last year’s values by over 31%.

The Vegetable Oil Price Index averaged 157.5 points in June, falling 9.8% from May and marking a four-month low. The sizeable month-on-month drop mainly reflects lower prices of palm, soy and sunflower oils.

The Dairy Price Index averaged 119.9 points in June, down 1% from May, ending 12 months of uninterrupted increases. At this level, the index value stood 22% above its value in the corresponding month last year. In June, international quotations for all dairy products represented in the index fell, with butter registering the highest drop, underpinned by a fast decline in global import demand and a slight increase in inventories, especially in Europe.

The Sugar Price Index averaged 107.7 points in June, up 0.9% from May, marking the third consecutive monthly increase and reaching a new multiyear high. Uncertainties over the impact of unfavorable weather conditions on crop yields in Brazil, the world’s largest sugar exporter, exerted upward pressure on prices.

The Meat Price Index averaged 109.6 points in June, up 2.1% from its revised value for May, continuing the increases for the ninth consecutive month and placing the index 15.6% above the corresponding month last year, but still 8%t below its peak reached in August 2014. In June, price quotations for all meat types represented in the index rose, primarily underpinned by firm global import demand, as increases in imports by some East-Asian countries compensated for a slowdown in China’s meat purchases, especially of pig meat.