The FAO Food Price Index continued declining in June. This was led by price decreases for all major cereals and most types of vegetable oils, according to the Food and Agriculture Organization of the United Nations (FAO). 

The FAO Food Price Index averaged 122.3 points in June, down 1.4% from May and 23.4% from its peak in March 2022. 

Cereal prices drop
The FAO Cereal Price Index declined 2.1% from May. International coarse grain quotations in June decreased by 3.4%, driven mostly by increased maize supplies from ongoing harvests in Argentina and Brazil and improved output prospects in key producing areas of the US. 

International wheat prices dropped by 1.3% as harvests began in the Northern Hemisphere, influenced by ample supplies and a lower export tax in Russia, along with improved conditions in the US. International rice prices declined by 1.2% amid subdued demand for non-Indica varieties and efforts by Pakistan to attract export sales.

The FAO Vegetable Oil Price Index declined by 2.4% from May, as lower world prices of palm and sunflower oils more than offset increases in quotations for soy and rapeseed oil, influenced by weather conditions in major growing regions.

The FAO Dairy Price Index declined by 0.8% in June, led by lower international cheese prices, even as world butter prices rose, driven by active demand for spot supplies, mainly from the Middle East.

Sugar decreases for first time in four months
The FAO Sugar Price Index declined by 3.2%, its first dro after four consecutive monthly increases, mainly triggered by good progress of the sugarcane harvest in Brazil and sluggish global import demand, particularly from China.

The FAO Meat Price Index was virtually unchanged in June, with poultry meat prices rising on the back of high import demand from East Asia amid ongoing supply challenges linked to the widespread avian influenza outbreaks. 

International pig meat prices also increased, while bovine and ovine meats dipped due to increased exportable availability from Oceania.

Record highs
According to the latest Cereal Supply and Demand Brief, world cereal production is predicted to hit a record high in 2023/24.

FAO raised its 2023 global cereal production forecast to 2 819 million tons, indicating a 1.1% increase from the previous year.

The higher forecast almost entirely reflects better prospects for global wheat production, now pegged at 783.3 million tons, buoyed by improved outlooks in several countries, including Canada, Kazakhstan and Türkiye. 

However, global wheat production still falls below last season’s output by 2.3%. Global coarse grain output for the year is forecasted to grow by 2.9% from 2022 to 1,512 million tons. Likewise, world rice production in 2023/24 is expected to rise 1.2% above the 2022/23 reduced level to 523.7 million tons.

World cereal utilization in the season ahead is expected to expand by 0.9% to 2,805 million tons, led by the expected increased use of coarse grains, especially maize, for animal feed.