Global food prices decline for the second consecutive month as the market awaits supply changes
- The latest data from the UN Food and Agriculture Organization shows that the global Food Price Index dipped slightly by 0.4% in June to 130.3 points, continuing the decline from May’s three-year high. The index is still 18.7% below the all-time peak recorded in March 2022.
- The grain price index led the decline, falling 3.5% on a monthly basis. Rapid harvesting progress and strong supply prospects in the Black Sea region continued to weigh on wheat prices, while expectations of abundant supply in South America and weaker crude oil also dragged corn performance. However, rising demand for indica rice among Asian buyers pushed the rice sub-index up by 3.2% against the trend.
- Sugar prices plunged by 5.7%, as falling ethanol prices in Brazil prompted sugar mills to divert more sugarcane to sugar production. Concerns about potential impacts from El Niño in India and Thailand limited the extent of the decline. Dairy prices dropped 1.5% due to increased supply.
- Among rising categories, the meat price index climbed 0.4% month-on-month to another record high, supported by robust global demand for poultry. Vegetable oil prices surged 3.8%, with strong palm oil and rapeseed oil quotations, partly driven by demand from the biodiesel sector.
- The Food and Agriculture Organization simultaneously maintained its 2026 global grain production forecast at 2.983 billion tons, down 1.9% compared to last year’s record level but still marking the second highest level in history. The overall landscape of relatively ample supply has not fundamentally changed.
- From a trading psychology perspective, as the market gradually digests the geopolitical conflict premium, attention is shifting to weather variables in major producing countries and the impact of energy prices. The supply-demand dynamics of sugar and oils may become the core drivers of short-term price fluctuations, and continued vigilance is necessary against the unfolding effects of El Niño on key production regions.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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