FAO Food Price Index Falls in May as Grain, Sugar Costs Drop

The FAO Food Price Index averaged 127.7 points in May 2025, down 0.8% from April, driven by lower international prices for cereals, vegetable oils and sugar. While meat and dairy prices rose, the overall index remains 6% higher than one year ago but 20.3% below its peak in March 2022.

The Cereal Price Index fell to 109.0 points, an 8.2% year-on-year decline. The global price of corn dropped sharply amid increased seasonal availability from Argentina and Brazil, and expectations of a record US harvest. Wheat prices also fell due to improved crop conditions and weak global demand, while rice prices rose 1.4%, buoyed by firm demand and currency effects in exporting countries.

Vegetable oil prices dropped 3.7% from April. Declines in palm, soybean, rapeseed and sunflower oils were attributed to seasonal production increases, weak biofuel demand in the US, and improved harvest outlooks in Europe.

The Meat Price Index rose 1.3% in May, led by higher prices for beef, sheep and pork. Beef prices hit a record high due to limited export supplies and strong demand. Poultry prices fell, particularly in Brazil, where an avian flu outbreak led to import restrictions and oversupply.

The Dairy Price Index increased by 0.8% from April and was up 21.5% from a year earlier. Butter and cheese prices were sustained by strong demand in Asia and the Middle East. Whole milk powder rose 4%, while skimmed milk powder declined slightly.

The Sugar Price Index dropped 2.6%, its third monthly decline, amid concerns about global economic conditions affecting food and beverage demand. Projections of improved sugar production in India and Thailand, linked to an early monsoon season, also contributed to downward price pressure.