In May, global food prices increased at their fastest monthly rate – a first in more than a decade. World cereal production is also on course to reach a new record high, the Food and Agriculture Organization of the United Nations (FAO) reports. 

The FAO Food Price Index averaged 127.1 points in May, 4.8 percent higher than in April and 39.7 percent higher than last May.

A surge in the international prices of vegetable oils, sugar and cereals led to the increase in the index – which tracks monthly changes in the international prices of commonly-traded food commodities – to its highest value since September 2011 and only 7.6 percent below its all-time peak in nominal terms.

The FAO Cereal Price Index increased 6.0 percent from April, led by international maize prices, which averaged 89.9 percent above their year-earlier value.

Maize prices started to retreat at the end of last month, mostly on improved production prospects in the US.

International wheat prices also showed a late-month decline but averaged 6.8 percent higher in May than in April, while international rice quotations held steady.

The FAO Vegetable Oil Price Index gained 7.8 percent in May, mainly reflecting rising palm, soy and rapeseed oil quotations.

Palm oil prices rose due to slow production growth in Southeast Asian countries, while prospects of robust global demand drove soy oil prices higher.

The FAO Sugar Price Index increased by 6.8 percent from April. This was largely due to harvest delays and concerns over reduced crop yields in Brazil, even as large export volumes from India contributed to easing the price surge.

The FAO Meat Price Index increased by 2.2 percent from April, with quotations for all meat types rising. This was due to Chinas faster pace of import purchases and rising internal demand for poultry and pig meats in the leading producing regions.

Meanwhile, the FAO Dairy Price Index rose by 1.8 percent in the month, averaging 28 percent above its level one year ago. The increase was led by solid import demand for skim and whole milk powders, while butter prices declined for the first time in almost a year on increased export supplies from New Zealand.

Record cereal output forecast
A new Cereal Supply and Demand Brief offers FAO’s first forecast for world cereal production in 2021 – now pegged at nearly 2 821 million tons, a new record and a 1.9 percent increase from 2020 – led by a foreseen 3.7 percent annual growth in maize output.

World cereal utilization in 2021/22 is predicted to expand by 1.7 percent to 2,826 million metric tons. Total cereal food consumption is forecast to rise in tandem with the world population, while increased wheat for animal feed is also anticipated. 

based on those forecasts, world cereal stocks at the close of crop seasons in 2021/22 are anticipated to increase by 0.3 percent to 811 million metric tons.

FAO’s first forecast for world trade in cereals in the new season indicates an increase of only 0.3 percent from the high level estimated for 2020/21 when trade is expected to expand by as much as 6.3 percent to a peak level of 468 million metric tons.