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Rome — World food prices fell for the third straight month in June, but remained close to record highs set in March, the UN food agency said Friday.
The May number was previously 157.4.
Despite the monthly decline, the June index was still 23.1 percent higher than it was a year ago, boosted by the effects of the Ukrainian conflict, strong global demand, and high production and transportation costs.
“In the first place, the factors that have caused global prices to soar are still working,” said Maximo Trelo Karen, Chief Economist at FAO.
Supply and demand of separate grains Estimate, FAO has raised its 2022 global grain production forecast from the previous 2,784 million tonnes to 2,792 million tonnes. This is still 0.6 percent below global production in 2021.
FAO’s grain index fell 4.1% from May, but still rose 27.6% year-on-year. According to FAO, the June decline is due to seasonal availability of new harvests in the Northern Hemisphere, improved crop conditions in some major producers and improved production prospects in Russia.
The vegetable oil price index fell 7.6% month-on-month due to seasonal increases in production in major producers and the outlook for increased supply from Indonesia.
The sugar index fell 2.6% from May, slowing global economic growth and squeezing demand.
The meat index rose 1.7% in June, a record high. Meanwhile, the dairy index rose 4.1% month-on-month. Global milk powder prices have risen due to strong import demand and a tight global supply.
FAO said the increase in grain production forecasts was driven primarily by an upward revision of 6.4 million tonnes against estimates of coarse grain production.
The forecast for global grain use in 2022/23 has also been raised, increasing by 9.2 million tonnes to 2,977 million tonnes. However, this shows a 0.1% drop at the 2021/22 level, primarily reflecting expectations for reduced feed usage.
FAO estimated global grain inventories totaling 854 million tonnes at the end of the 2023 season, an increase of 7.6 million tonnes from last month’s forecast, but still down 0.6% year-on-year.
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