(VAN) New FAO forecasts point to record global cereal output with a partial rebound in stocks and trade.
Gathering maize in Kenya.
The benchmark of world food commodity prices dropped in May as marked declines in international quotations for maize and palm oil outweighed historically high prices for butter and bovine meat, the Food and Agriculture Organization of the United Nations (FAO) reported on Friday.
The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 127.7 points in May, down 0.8 percent from April but remained 6.0 percent higher than a year earlier.
The FAO Cereal Price Index declined in May, down 1.8 percent from April and 8.2 percent below its May 2024 level. Global maize prices declined sharply, owing to strong harvests and robust availability in Argentina and Brazil and expectations of a record crop in the United States of America.
World wheat prices edged down due to improved crop conditions in the northern hemisphere, while the FAO All-Rice Price Index increased by 1.4 percent in May, driven by firm demand for fragrant varieties, higher prices for Indica rice, and currency fluctuations.The FAO Vegetable Oil Price Index dropped by 3.7 percent from April, with quotations down for all major oils.
International palm oil prices declined markedly primarily due to seasonal output and availability increases in Southeast Asia, global soy oil prices were impacted by higher supplies in South America and subdued demand for biofuel feedstock, rapeseed oil prices eased on improved supply prospects in the European Union, while sunflower oil prices fell due to weakening global import demand and reduced price competitiveness.
The FAO Sugar Price Index decreased by 2.6 percent in May amid concerns over the uncertain world economic outlook, possible weaker demand from the beverage and food processing industries, and expectations of a recovery in global production next season.
The FAO Meat Price Index increased by 1.3 percent from its revised April level, as a result of higher quotations for ovine, pig and bovine meats, with the latter reaching a new historic high. By contrast, poultry meat prices declined, driven by lower quotations in Brazil, where the detection of high-pathogenicity avian influenza on a commercial farm in mid-May prompted import bans by several major importing countries, resulting in surplus supplies.
The FAO Dairy Price Index rose by 0.8 percent in May, with strong demand from Asia keeping international butter prices at historic highs and spurring higher prices for cheese and whole milk powder.
Cereal supply and demand in the year ahead
FAO also released a new Cereal Supply and Demand Brief on Friday, forecasting a record global cereal production of 2 911 million tonnes in 2025, up 2.1 percent from 2024.World cereal utilization is forecast to increase by 0.8 percent in 2025/26, reaching 2 898 million tonnes.
Global food consumption of cereals is predicted to grow by 0.9 percent, while feed use is forecast to expand by 0.5 percent.With cereal production expected to exceed utilization, world cereal stocks are predicted to expand by 1.0 percent in 2025/26 to 873.6 million tonnes, partially recovering from their contraction in the previous year.
Based on the current forecasts, the global cereal stock-to-use ratio should remain broadly stable at 29.8 percent.Global cereal trade is also predicted to rebound by by 1.9 percent in 2025/26 to 487.1 million tonnes, with a 3.8 percent growth in wheat trade expected to offset a 0.7 percent contraction for rice.
The Brief has also updated the estimated production, stocks and trade figures for the 2024/25 marketing season.More details are available here.
FAO’s Food Outlook report, to be released on 12 June, will provide a more detailed analysis of global cereal markets and other basic food commodities.
The Agricultural Market Information System (AMIS), hosted by FAO, also published its monthly Market Monitor on Friday. In addition to the regular market analysis, the new issue features an article on the impact of climate factors on maize yields around the world, emphasizing the importance of regional analysis.
It notes significant weather-related yield variations in Eastern Europe, India and Southern Africa, while yields are more stable in China and the United States of America, which together account for half of global maize production.
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