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World food prices fall amid record grain harvest - UN

World food prices fall amid record grain harvest - UN Photo: Food prices in the world fell by 2% over the year (Getty Images)

Global food prices remained unchanged in June 2024, as the rise in international quotations for oils, sugar, and dairy products offset the decline in grain quotations, according to the UN Food and Agriculture Organization (FAO).

The FAO Food Price Index averaged 120.6 points in June, matching the revised figure for May. The index is currently 2.1% lower than a year ago and 24.8% below its peak in March 2022 following Russia's invasion of Ukraine.

World food prices fall amid record grain harvest - UN

The FAO Cereal Price Index fell by 3.0% in June compared to May, with quotations for coarse grains, wheat, and rice declining. This decrease was partly due to improved production prospects in major exporting countries.

In contrast, the FAO Vegetable Oil Price Index rose by 3.1% from May, driven by a revival in global import demand for palm oil and steady demand from the biofuel sector in the Americas for soybean and sunflower oil.

After three consecutive monthly declines, the FAO Sugar Price Index increased by 1.9% from May. This rise was largely due to concerns about the potential impact of adverse weather conditions and monsoons on production in Brazil and India.

The FAO Dairy Price Index increased by 1.2%, with international quotations for butter reaching a 24-month high amid rising global demand for short-term supplies, high retail sales, seasonal declines in milk supply in Western Europe, and low stocks in Oceania.

The FAO Meat Price Index remained almost unchanged in June, as a slight increase in global prices for lamb, pork, and beef nearly offset a decline in international poultry prices due to reduced supply.

Record grain harvest

FAO also updated its forecast for global grain production in 2024, now estimated at 2,854 million tonnes, a new historical high.

The revised forecast is attributed to improved prospects for maize crops in Argentina and Brazil, as well as in Turkey and Ukraine, offsetting lower forecasts for Indonesia, Pakistan, and several Southern African countries.

The wheat production forecast was also raised based on better prospects in Asia, particularly in Pakistan, which is expected to surpass the anticipated decline in the Russian Federation due to adverse weather conditions in major wheat-growing areas early in the season.

Food prices in Ukraine

According to the State Statistics Service, in May 2024, compared to May last year, prices in the production of food, beverages, and tobacco products increased by 11.0%, including 8.1% within Ukraine and 18.6% outside Ukraine.

The largest price increases were observed in meat production, up by 17.9%, including 18.2% within Ukraine, and dairy production, up by 12.9%, including 12.2% within Ukraine.