The United Nations Food and Agriculture Organization (FAO) released its World Food Price Index (FFPI) for June 2024, showing a mixed picture of global food prices. Some commodities rose, while others fell, resulting in overall stability.
According to the FAO’s report, the average value of the food price index in June 2024 was 120.6 points, unchanged from May. This represents a 2.1% decrease from last year and a 24.8% drop from the peak of 160.3 points in March 2022, indicating a general easing of global food price pressures over the past two years.
A key factor stabilizing food prices in June was the decline in grain prices. The grain price index was 115.2 points, a 3% decrease from May and a 9% drop from June 2023. This decline was observed across major grains globally.
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Wheat prices dropped due to the start of crop harvesting in the Northern Hemisphere, improved production forecasts in countries like Kazakhstan and Ukraine, and a temporary import ban imposed by Turkey. Corn prices also fell as harvests progressed in Argentina and Brazil, along with higher-than-expected yields in the United States. The report also noted decreases in barley and sorghum prices.
Unlike grains, vegetable oil prices rose in June 2024, increasing by over 3% to their highest level since March 2024. The vegetable oil price index reached 131.8 points, 4 points higher than in May, driven by palm, soybean, and sunflower oils, while rapeseed oil prices remained stable.
The FAO attributes the rise in palm oil prices to increased buying activity due to more favorable pricing. Soybean and sunflower oil prices also jumped, influenced by strong biofuel demand in the US and limited supply of sunflower oil from the Black Sea region.
Sugar prices rose by approximately 2% in June after three months of decline. The sugar price index reached 119.4 points, 2.3 points higher than in May, but still 21.6% lower than the previous year. Contributing factors included crop damage in Brazil, concerns about future dry weather and unexpected monsoons in India, and declining crop forecasts in the European Union.
The dairy sector saw a modest increase in prices, with the dairy price index rising by 1.2% compared to May, reaching 127.8 points, a 6.6% increase from the previous year. Butter prices hit a 24-month high due to increased global demand and decreased milk supply in Western Europe, compounded by low butter stocks in Oceania.
Milk powder prices rose due to continued imports from East Asia and strong sales in Western Europe. Cheese prices slightly declined due to a global demand slowdown, while meat prices remained stable.
Despite fluctuations in food commodities, the FAO projects record global grain production in 2024. This forecast offers hope for price stabilization or decreases in the grain market.
The June 2024 FFPI report highlights the interconnected global food markets. While the overall stability in food prices is encouraging, the variations across food categories underscore the need for continued monitoring and adaptive policies.
The drop in grain prices could bring relief to consumers and food-importing countries, easing inflationary pressures on food staples. However, the increases in vegetable oil, sugar, and dairy prices highlight the volatility in global food markets.
Climate factors continue to significantly impact price fluctuations, as seen in the effect of weather conditions on sugar and grain production in different regions. This highlights the importance of sustainable agricultural practices and climate-resilient farming methods to ensure stable food supplies in changing environmental conditions.
