Background on the Food and Agriculture Organization (FAO)
The Food and Agriculture Organization (FAO) is a specialized agency of the United Nations that leads international efforts to defeat hunger. It was founded in 1945 and is headquartered in Rome, Italy. The FAO works globally to eradicate hunger, ensure food security, improve nutrition, and promote sustainable agriculture.
Overview of June’s Global Food Price Index
According to the FAO, global prices for essential food commodities experienced a slight increase in June. This rise was primarily driven by higher prices for meat, vegetable oils, and dairy products.
Key Findings
- Average Index Level: The FAO’s Food Price Index averaged 128.0 points in June, marking a 0.5% increase from May.
- Year-over-year Comparison: The index was 5.8% higher than in June of the previous year.
- Historical High: The index remained 20.1% below its all-time high reached in March 2022.
Price Trends by Food Category
- Cereal Prices: The cereal price index fell by 1.5% to 107.4 points, which is 6.8% lower than in 2024. This decline was mainly due to a sharp drop in global corn prices, influenced by ample supplies from Argentina and Brazil and increased export competition.
- Vegetable Oil Prices: The vegetable oil price index increased by 2.3% from May, reaching 155.7 points—an 18.2% rise compared to June 2024. This uptick was fueled by higher palm, rapeseed, and soybean oil prices due to strong demand for imports and anticipated increased biofuel sector demand following supportive measures in Brazil and the United States.
- Sugar Prices: Sugar prices dropped by 5.2% from May, falling to 103.7 points—the lowest level since April 2021. This decrease reflected improved supply outlooks in Brazil, India, and Thailand.
- Meat Prices: Meat prices reached a record high of 126.0 points, marking a 6.7% increase from June 2024 across all categories except poultry. Beef prices hit a new high, reflecting Brazil’s reduced supply and strong demand from the United States.
- Dairy Prices: The dairy price index rose by 0.5% from May, reaching 154.4 points with a yearly increase of 20.7%.
FAO’s Global Cereal Production Forecast for 2025
In a separate report, the FAO projected global cereal production for 2025 to reach a record-breaking figure in millions of tonnes, marking a 0.5% increase from previous projections and a 2.3% rise compared to the preceding year.
However, favorable and dry conditions are expected in some parts of the Northern Hemisphere, particularly affecting corn production, as planting nears completion.
Key Questions and Answers
- What is the FAO? The Food and Agriculture Organization (FAO) is a specialized agency of the United Nations that leads international efforts to defeat hunger, ensure food security, improve nutrition, and promote sustainable agriculture.
- What drove the increase in global food prices in June? The rise was primarily due to higher prices for meat, vegetable oils, and dairy products.
- Which food categories experienced the most significant price changes? Meat prices reached a record high, while cereal prices fell due to ample supplies of corn from Argentina and Brazil.
- What does the FAO predict for global cereal production in 2025? The FAO projects a record-breaking global cereal production for 2025, with potential impacts from favorable and dry conditions in some parts of the Northern Hemisphere.
