The global food market experienced further decreases in prices in June, resulting in a positive impact on consumer inflation rates, according to the United Nations Food and Agriculture Organization (FAO). Furthermore, grain production is predicted to increase in the 2023/24 season.
The FAO’s food price index, which monitors the prices of essential food items worldwide, recorded an average of 122.3 points in June. This represents a 1.4% decrease from May’s index and a significant 23.4% decrease compared to March 2022. The main contributors to this decline were dairy, sugar, and grain prices.
Specifically, cereal prices averaged 126.6 points in June, exhibiting a 2.1% drop from May. Most grains witnessed a decline in prices over the course of the month. For instance, corn prices experienced a fifth consecutive month of decline due to ample supplies from South America. Additionally, rain in crucial U.S. agricultural states towards the end of June allayed concerns about crop conditions. Wheat prices also fell by 1.3%, while rice dropped by 1.2%, as reported by the FAO.
Looking ahead, the FAO projects that grain production will reach an estimated 2.819 billion metric tons in the 2023/24 season, signifying a 1.1% increase compared to the previous year’s harvest. This projected growth is expected to contribute to a record-high cereal stock of 878 million tons.
These developments in food prices and grain production reveal promising trends for global consumers and provide an optimistic outlook for future food security.
Wheat Production Outlook
According to the latest forecast, wheat production is expected to be the highest among all crops in 2023/24, reaching a total of 783.3 million tons. Although this projection is slightly lower than the record output of 18.4 million tons achieved last year, the wheat industry still shows promising growth prospects.
Fluctuating Prices in the Agricultural Market
In June, the prices of vegetable oil experienced a decline of 2.4% compared to May. This decrease was primarily driven by the falling prices of palm and sunflower oil. Furthermore, dairy prices also dropped by 0.8%, resulting in a significant 22.2% decrease from the prices recorded a year ago. Conversely, meat prices remained relatively stable, as the increases in pork and poultry prices offset the declines in beef.
Sugar Prices Experience a Decline
After four consecutive months of price increases, sugar prices have finally seen a decline of 3.2%. However, it is worth noting that prices are still substantially higher, approximately 30%, compared to the previous year. The Food and Agriculture Organization (FAO) attributes this decline to concerns regarding the potential impact of the El Niño phenomenon on sugarcane crops in 2023/24, as well as the strength of the Brazilian real against the United States dollar.
