World food price index up for second month in April, says U.N. agency

The United Nations food agency's world price index rose for a second consecutive month in April as higher meat prices and slight gains for vegetable oils and cereals outweighed decreases for sugar and dairy products.

The Food and Agriculture Organization's (FAO) price index, which tracks the most globally traded food commodities, averaged 119.1 points in April, up from a revised 118.8 points for the previous month, the agency said on May 3.

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The FAO's April reading was nonetheless 7.4% below the level a year earlier.

The indicator hit a three-year low in February as food prices continued to move back from a record peak in March 2022 at the start of Russia's full-scale invasion of fellow crop exporter Ukraine.

Fed in a holding pattern as inflation delays approach to any soft landing

In April, meat showed the strongest gain in prices, rising 1.6% from the prior month. Higher prices for poultry, beef and sheep meat offset a small fall for pork, which was affected by slow demand in Western Europe and from leading importers, especially China, the FAO said.

The FAO's cereal index inched up to end a three-month decline, supported by stronger export prices for maize (corn). Vegetable oil prices also ticked higher, extending previous gains to reach a 13-month high due to strength in sunflower and rapeseed oil.

The sugar index dropped sharply, shedding 4.4% from March to stand 14.7% below its year-earlier level amid improving global supply prospects.

Dairy prices edged down, ending a run of six consecutive monthly gains.

2024 brings breather on inflation but food prices are still sticky

In separate cereal supply and demand data, the FAO nudged up its estimate of world cereal production in 2023/24 to 2.846 billion metric tons from 2.841 billion projected last month, up 1.2% from the previous year, notably due to updated figures for Myanmar and Pakistan.

For upcoming crops, the agency lowered its forecast for 2024 global wheat output to 791 million tons from 796 million last month, reflecting a larger drop in wheat planting in the European Union than previously expected.

The revised 2024 wheat output outlook was nonetheless about 0.5% above the previous year's level.