Prices for dairy products increased by 1.8% - FAO

The main driver of growth was strong import demand for skimmed and whole milk powder, while prices for butter declined for the first time in almost a year due to an increase in exports by New Zealand.

Overall, global food prices rose by the most in more than a decade in May, despite the fact that global grain production may reach a new unprecedented high level.

In May, the average value of the FAO Food Price Index was 127.1 points, which is 4.8 percent higher than in April and 39.7 percent higher than in May 2020.

One of the factors behind the growth of this index, which tracks monthly fluctuations in world prices for the most popular food products, was the sharp rise in world prices for vegetable oils, sugar and cereals; it reached its highest level since September 2011, which is only 7.6 percent below its historical maximum in nominal terms.

Compared to April, the FAO cereal price index increased by 6.0 percent, mainly due to an increase in world corn prices, the average value of which was 89.9 percent higher than last year. However, at the end of May, corn prices began to decline mainly due to improved crop prospects in the United States. Global wheat prices also started to decline at the end of the month, but on average, May prices were 6.8 percent higher than in April, while global rice prices remained stable.

The FAO vegetable oil price index added 7.8 percent in May, mainly driven by higher prices for palm, soybean and rapeseed oils. Palm oil prices rose due to slow production growth in Southeast Asia, and projected sustained strong global demand, especially from the biodiesel sector, contributed to higher soybean oil prices.

The average value of the FAO Sugar Price Index increased by 6.8 percent in May compared to April, mainly due to delays in the harvesting campaign and concerns about low yields in Brazil, the world's largest sugar exporter, even though a large volume of supplies from India contributed to a slowdown in price growth.

Compared to April, the value of the FAO Meat Price Index increased by 2.2 percent, with quotations of all types of meat growing under the influence of increased import purchases from China, as well as due to increased domestic demand for poultry and pork in the leading producing regions.

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