Grain prices fall in June, led by wheat and maize declines

08 July 20243 min reading

The benchmark for world food commodity prices was unchanged in June, as increases in international quotations for vegetable oils, sugar and dairy products offset a decrease in those for cereals, the Food and Agriculture Organization of the United Nations (FAO) reported. The FAO Cereal Price Index declined by 3.0 percent in June from May, with quotations for coarse grains, wheat and rice all down, driven in part by improved production prospects in major exporting countries.

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.6 points in June, the same as its revised figure for May. The index is now 2.1 percent lower than its year-earlier value and 24.8 percent below its March 2022 peak.

The FAO Cereal Price Index averaged 115.2 points in June, down 3.5 points (3.0 percent) from May and 11.4 points (9.0 percent) from its June 2023 value. Global export prices of all major cereals decreased month on month. The decline in wheat prices mostly reflected seasonal pressure from ongoing harvests in the northern hemisphere. Slightly improved production prospects in some major exporting countries, including Kazakhstan and Ukraine, along with the implementation of a temporary import ban by Türkiye also contributed to the softer price tone. Maize export prices also dropped in June, as harvests in Argentina and Brazil progressed, with production in both countries now expected to be larger than earlier anticipated. In addition, larger-than-previously-expected planted area to maize in the United States of America, along with generally good crop conditions, also contributed to the price decline. Among other coarse grains, world prices of barley and sorghum also fell in June. The FAO All Rice Price Index posted a modest monthly decline in June, largely reflecting generally quiet trading activities.

The FAO Vegetable Oil Price Index, by contrast, rose 3.1 percent from May, buoyed by reviving global import demand for palm oil and firm demand from the biofuel sector in the Americas for soy and sunflower oils.

The FAO Sugar Price Index increased by 1.9 percent from May after three consecutive monthly declines, due in large part to concerns over the likely impact of adverse weather and monsoons on production in Brazil and India.

The FAO Dairy Price Index rose by 1.2 percent, with international quotations for butter reaching a 24-month high on the back of increased global demand for near-term deliveries amidst strong retail sales, seasonally falling milk deliveries in Western Europe and low inventories in Oceania. The FAO Meat Price Index was virtually unchanged in June, as slight increases in the world prices of ovine, pig and bovine meats nearly offset a supply-led decline in international poultry meat prices

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