International food commodity prices remained largely stable in May, but behind the apparent equilibrium, new tensions are emerging on global agricultural markets. This is according to the FAO, which has published its latest Food Price Index, the indicator that monitors global prices for major food products.
The index stood at 130,8 points, a slight decrease of 0,2% compared to April, but still 2,9% higher than the same period in 2025. The overall index was mainly held back by the decline in vegetable oils, which offset the increases recorded in the cereals and sugar sectors.
According to Boubaker Ben-Belhassen, Director of the FAO Markets and Trade Division, global agricultural markets are showing good resilience, but remain exposed to risk factors. "The rise in cereal prices highlights the sector's vulnerability to weather events, higher energy prices, and tensions in agricultural input markets," he explained.
The cereal sector is particularly worrying. The FAO Cereal Index rose 2,6% from April and 5% year-over-year. Wheat prices rose 3,4% in the month and 7,8% from 2025, buoyed by lower harvest prospects in major exporting countries. In the United States, winter wheat conditions are among the worst in decades, and prices for Hard Red Winter wheat have risen 28% from a year ago.
Corn also increased by 1,9%, driven by strong international demand, reduced availability in Brazil and the United States, and rising energy prices, which is supporting ethanol production. Rice also rose, rising 2,7% due to climate concerns and rising oil prices.
Vegetable oils bucked the trend. The FAO sector index lost 4,6% monthly, marking the first decline of 2026. Palm oil was the most declining, penalized by expectations of weaker global demand and uncertainty in energy markets. The situation was more complex for soybean oil, while rapeseed and sunflower oil benefited from limited supplies.
In the meat sector, prices remained virtually unchanged (+0,1%). Strong demand from China and the United States boosted beef prices, while pork prices declined due to ample European supplies.
Dairy products also declined slightly (-0,5%), with butter declining and skimmed milk powder rising. Sugar, on the other hand, recorded the most significant increase, up 7,5% compared to April. Prices were supported by fears of lower production in Brazil, where a growing share of sugarcane could be used for ethanol, as well as concerns about the effects of El Niño on India and Thailand.
On the production front, the FAO forecasts a slowdown in the global cereal market. After the record harvest in the 2025/26 season, world cereal production in 2026/27 is expected to decline by 2%, reaching 2,982 billion tonnes, mainly due to the decline in wheat production.
World grain trade is also expected to contract slightly (-0,3%), while consumption will continue to grow, albeit at a slower pace. The inventory situation remains relatively reassuring, with the global stock-to-utilization ratio forecast at 31,7%.
FAO also emphasizes that tensions in the Strait of Hormuz and rising energy and fertilizer costs could further put pressure on the global agri-food system in the coming months, necessitating coordinated international action to ensure market stability.
