FAO food prices fall for second straight month in June

The United Nations Food and Agriculture Organization reported on Friday that global food commodity prices declined for a second consecutive month in June, as lower cereal, sugar, and dairy prices outweighed increases in vegetable oils and meat.

The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 130.3 points in June 2026, down from 130.8 points in May. The index had already retreated in May after reaching a three-year high in April, when escalating conflict in the Middle East drove up energy costs and vegetable oil prices.foodingredientsfirst+3

Despite the recent easing, the June reading was 1.7% higher than a year earlier, though it remains 18.7% below the record peak set in March 2022 following Russia's full-scale invasion of Ukraine.economictimes

Sub-Indexes Show Mixed Picture

Declines in sugar, cereals, and dairy drove the overall index lower, but not all food categories moved in the same direction. Vegetable oil prices rose during the month, and the meat price index continued its climb to record territory. The meat index has been setting successive all-time highs since mid-2025, reflecting tight global supplies of bovine and poultry products.english.aawsat+2

The April spike that pushed the index to its highest level since early 2023 was largely attributed to surging vegetable oil costs tied to disruptions near the Strait of Hormuz, which increased shipping and energy expenses.economictimes+1

El Niño Risks Loom Over Production Outlook

FAO's latest Cereal Supply and Demand Brief forecast global cereal production for the 2026/27 season at approximately 2,982 million metric tons, down about 2% from the record 3,043 million tons harvested in 2025/26 but still historically elevated.fao+2

The outlook faces uncertainty from a building El Niño event. NOAA has placed the probability of El Niño developing this year above 90%, and FAO and the World Food Programme launched a joint appeal in June seeking $202 million to protect nearly nine million people across 22 high-risk countries from El Niño-related drought, floods, and storms.commodityreport.substack+1

According to Reuters ↗ 5.06%, FAO Director-General QU Dongyu's organization warned that the Sahel, Southern Africa, South and Southeast Asia, and Central America's Dry Corridor face the sharpest agricultural drought risks. Meanwhile, FAO's March 2026 Crop Prospects report noted that 41 countries worldwide still require external food assistance, with 31 of them in Africa.downtoearth+2