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Food prices fall in May, grain production is expected to fall, the UN agency says

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World food prices fell for the second straight month in May after hitting a record high in March, despite rising grain and meat costs, the United Nations food agency said on Friday.

The Food and Agriculture Organization (FAO) Food Price Index, which tracks the world’s most traded groceries, averaged 157.4 points last month, up from 158.3 in April.

The April number was previously reported as 158.5.

Despite the monthly decline, the May index was still 22.8% higher than a year earlier, partly driven higher by concerns about the impact of the Russian invasion of Ukraine.

In separate estimates of grain supply and demand, the FAO said it expected global grain production to fall in the 2022/23 season for the first time in four years, down 16 million tonnes from 2021’s record level of 2.784 billion tonnes would correspond.

While the milk, sugar and vegetable oil price indices all fell last month, the meat index rose to an all-time high and the grain index rose 2.2%, with wheat posting a monthly gain of 5.6%. YoY Wheat Prices Up 56.2%

The FAO said wheat prices were boosted by India’s announcement of an export ban and reduced production prospects in Ukraine following the Russian invasion.

The vegetable oil price index fell 3.5% from April, partly pushed down by Indonesia’s decision to lift a short-lived palm oil export ban.

“Export restrictions create market uncertainty and can lead to price spikes and increased price volatility. The drop in oilseed prices shows the importance of lifting them and allowing exports to flow smoothly,” said FAO chief economist Maximo Torero Cullen.

The milk index also fell 3.5% mom, with the price of powdered milk falling the most on market uncertainties surrounding ongoing COVID-19 lockdowns in China.

The meat index rose 0.6% in May, with stable global beef prices and falling pork prices offset by a sharp rise in poultry prices.

When the FAO released its first forecast for world grain production, it predicted that corn, wheat and rice production would fall, while barley and sorghum production would increase.

“The forecasts are based on the conditions of the plants already in the ground and the planting intentions for those that have yet to be sown,” the FAO said.

Global grain use was forecast to fall 0.1% in 2022/23 from 2021/22 levels to 2.788 billion tonnes – the first decline in 20 years.

https://www.independent.ie/business/farming/news/food-prices-dip-in-may-cereal-output-set-to-decline-un-agency-says-41717070.html Food prices fall in May, grain production is expected to fall, the UN agency says

Fry Electronics Team

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