The FAO Food Price Index rose 0,5 percent in June from May to stand at 128,0 points. The increase, led by higher prices for dairy products, meat and vegetable oils, more than offset lower international prices for cereals and sugar. On a year-on-year basis, the index rose 5,8 percent, but remained well below its peak reached in March 2022.
The FAO Cereal Price Index declined 1,5 percent, with international maize prices falling sharply on strong supplies from Argentina and Brazil, while sorghum and barley prices followed suit. Wheat bucked the trend, rising on climate-related concerns in the EU, Russia and the US. Rice, particularly Indica varieties, fell slightly on slowing demand.
The FAO Vegetable Oil Index rose 2,3%, driven mainly by palm oil (+5%), soybeans and rapeseed. Expectations of higher demand for biodiesel in Brazil and the US, combined with limited supplies and solid demand, supported the gains.
Meat reached a new all-time high, with the FAO Meat Index rising by 2,1%. Prices of bovine, pig and ovine meat rose, while poultry continued to decline. Dairy products (+0,5%) also rose, with butter hitting a new record high due to limited supplies in Oceania and the EU, and sustained demand from Asia. Milk powder prices, on the other hand, fell.
Bucking the trend, sugar fell 5,2% to its lowest level since April 2021, due to favorable production prospects in Brazil, India and Thailand. In parallel, FAO updated its forecast for global cereal production for 2025/26, estimated at a record high of 2.925 0,5 million tonnes, up 2,3% from last month and 2,2% on an annual basis. Wheat, maize and rice production are rising thanks to higher yields in India, Pakistan and South America. World stocks are expected to rise 889,1% to 30,3 million tonnes, with the stocks/use ratio rising to 1,2%, signaling a relatively stable supply situation. Global trade in cereals is also expected to increase (+XNUMX%), with rice trade likely to hit a new all-time high.
