Global food commodity prices fell in May for the second consecutive month, the Food and Agriculture Organisation of the United Nations (FAO) has said.
The fall was led by declines in the vegetable oil and dairy price indices, while the sugar price index also fell to a lesser extent, according to details highlighted in the Food Price Index report released on Friday.
The index tracks the international prices of the most commonly traded food commodities.
The report said the FAO Vegetable Oil Price Index averaged 229.3 points in May, down 3.5 per cent month-on-month, yet remaining markedly above its year-earlier level.
It said the monthly decline mainly reflects lower prices across the palm, sunflower, soy, and rapeseed oils. International palm oil prices weakened moderately in May.
“Apart from demand rationing, the removal of Indonesia’s short-lived export ban on palm oil exerted additional downward pressure on prices, although a further price drop was contained by lingering uncertainties over the country’s export prospects,” the FAO said.
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According to the report, the FAO Dairy Price Index averaged 141.6 points in May, down 3.5 per cent from April, marking the first decline after eight consecutive monthly increases, but still 20.5 points (16.9 per cent) higher than its level in May of last year.
It said world prices of all milk products fell, with milk powders declining the most, underpinned by lower buying interests on market uncertainties stemming from the continued lockdown in China, despite the persistent global supply tightness.
Butter prices also dropped significantly due to weaker import demand in tandem with some improvements to supplies from Oceania and limited internal sales in Europe.
The FAO Sugar Price Index averaged 120.3 points in May, down 1.1 per cent from April, marking the first decline after sharp increases registered in the previous two months. The report said that the monthly decline in international sugar price quotations was triggered by limited global import demand and good global availability prospects, mostly stemming from a bumper crop in India.
