World Food Prices Fall for 2nd Month

The FAO Food Price Index declined for a second consecutive month, easing to 130.3 in June 2026 from 130.8 in May. Cereals led the decline, with prices falling 3.5%, as wheat dropped 4.4% amid rapid harvest progress and favorable supply prospects in the Black Sea region, outweighing concerns over crop conditions in the US and Australia. Sugar prices also fell 5.7%, as lower domestic ethanol prices in Brazil encouraged mills to divert more sugarcane toward sugar production. However, concerns about the potential impact of El Niño on the 2026/27 sugar harvests in major producers such as India and Thailand helped limit the decline. Dairy prices slipped 1.5%, reaching their lowest level since 2023, with weaker prices across all major products. In contrast, meat prices edged up 0.4% to a fresh record high, driven primarily by higher poultry prices. Vegetable oil prices rose 3.8%, supported by stronger palm and rapeseed oil quotations, while sunflower oil prices remained broadly stable.

The FAO Food Price Index edged down 0.2% to 130.8 points in May 2026 from an upwardly revised 131 points in April which was the highest reading since January 2023. Prices of cereals rose 2.6% reaching the highest level since June 2024, reflecting higher prices across all major cereals. World wheat prices rose for the fourth consecutive month, supported by smaller-than-expected harvests in major exporters, including the US, while higher fuel and fertilizer costs added further upward pressure globally. In addition, sugar prices soared 7.5% mainly driven by concerns over an anticipated tightening of global sugar supplies in the coming months. Meat costs edged up 0.1% with higher quotations for bovine and ovine meat. In contrast, dairy prices decreased 0.5% to reach the lowest level since January 2024 and vegetable oils cost tumbled 4.6% mainly driven by lower prices of palm and soy oils, which more than offset increases in rapeseed oil and sunflower oil prices.

The FAO Food Price Index rose 1.6% to 130.7 points in April 2026, marking a third consecutive monthly increase and reaching the highest since February 2023. Prices for vegetable oils jumped 5.9% to hit a fresh June-2022 high, driven by palm, soy, sunflower and rapeseed oils amid disruptions linked to the war with Iran. Prices of cereals rose 0.8% to its highest since February 2025, reflecting higher prices across major cereals, except sorghum and barley. Wheat went up 0.8% on drought concerns in parts of the US, expectations of lower rainfall in Australia, and prospects of reduced wheat plantings in 2026 due to elevated fertilizer and energy costs linked to disruptions around the Strait of Hormuz. Meat prices were up 1.2% to hit a record high. On the other hand, sugar declined 4.7%, amid expectations of ample global supplies in the current season and improved production prospects in China and Thailand. Dairy products decreased 1.1% driven by lower quotations for butter and cheese.