Global index United States For product prices fell in May to the lowest level in two years, as lower prices for vegetable oilsfrom flakes and from dairy was more than the increase in sugar and meat.

Its price index Food and Agriculture Organization (FAO)which tracks food prices around the world, averaging 124.3 units in May up from a revised 127.7 the previous month, the FAO announced today. The originally listed price for April was 127.2.

This is the lowest price of this index since April 2021 and means that the index is now 22% lower than the all-time high recorded in March 2022 after the start of the Russian invasion of Ukraine.

The FAO Cereal Price Index fell by almost 5% in May compared to the previous month, under pressure from very good supply prospects and the extension of the Black Sea Grain Initiative, which allows cargo from Ukraine.

But international rice prices continued to rise in May, partly due to reduced supply in some exporting countries, the FAO said. Last month, the agency expressed concern about rising commodity prices.

The vegetable oil price index fell nearly 9% m/m, reflecting shortages in oilseeds and weak demand for palm oil, while global dairy prices fell 3% on the back of a seasonal increase in Northern Hemisphere milk production, organization data.

In contrast, the price of sugar rose 5.5% from April for the fourth straight month due to weather concerns. El Niño added to global supply risks, FAO said.

However, the improvement in meteorological conditions in Brazil and lower crude oil prices capped sugar prices in the markets. Futures ended lower in May after hitting a 12-month high in late April.

In a separate report on cereal supply and demand, FAO raised its forecast for global cereal production this year to 2.813 billion tonnes, up 1% from 2022, mainly due to an expected increase in maize production.

Global grain stocks are expected to rise 1.7% year-on-year in 2023/24 to a record 873 million tonnes, driven by higher expected stocks of corn, rice and barley.

However, wheat inventories are expected to decline as production declines and demand is expected to remain stable.