FAO: Global Food Prices Slightly Decline in August, Driven by Lower Sugar, Meat, and Cereal Costs

Some sectors saw price increases. The FAO Dairy Price Index rose by 2.2%, with whole milk powder and butter prices climbing due to strong import demand and concerns over milk supply in Western Europe.

The FAO Vegetable Oil Price Index also rose by 0.8%, reaching a 20-month high, thanks to rising palm oil prices that offset declines in soy, sunflower, and rapeseed oils.

Key price drops were recorded in sugar, meat, and cereals, with the FAO Sugar Price Index falling by 4.7% to its lowest level since October 2022. The improved production outlook in India and Thailand and lower global crude oil prices contributed to the decline. Meanwhile, cereal prices were down 0.5%, driven by lower global wheat prices due to competitive supplies from the Black Sea region and better-than-expected harvests in Argentina and the U.S.

Despite these price changes, global cereal production in 2024 is forecast to remain stable at 2,851 million tonnes, with wheat and rice output expected to rise. FAO's forecast also shows a slight increase in global cereal utilisation and stocks for the upcoming seasons, with rice consumption reaching an all-time high. However, international trade in cereals is projected to decline by 3.3% from the previous season due to lower volumes of coarse grains.