After moving mainly lower throughout 2023, world food commodity prices are on the march higher again.
The Food and Agriculture Organization of the United Nations (FAO) on Friday reported its food price index averaged 120.4 points in May, up almost 1% from the revised April figure and the third straight monthly increase.
The index – which tracks monthly changes in the international prices of a set of globally traded food commodities- was mainly buoyed in May by a 6.3% increase in the price for cereals, including wheat. Wheat prices have moved higher amid woes in various parts of the world, including the Black Sea region, where drought and freezes have battered crops in parts of Ukraine and Russia, the world’s No. 1 exporter. Heavy, persistent rain is also denting yield prospects in parts of Europe, including largest producer, France.
World corn export prices also increased in May, pushed higher by production concerns in both Argentina, due to corn stunt disease, and Brazil, where poor weather has hurt the crop. Spillover from higher wheat prices has also lifted corn, as has limited selling activity in Ukraine.
Higher world dairy prices (+1.8%) further contributed to the overall increase in the FAO’s food price index in May. Dairy prices were underpinned by increased demand from the retail and food services sectors ahead of the summer holidays, as well as market expectations that milk production in Western Europe may fall below historical levels, the FAO said.
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