The FAO Food Price Index remained steady at 120.6 in June 2024, the same as the revised value for May 2024. This stability reflects mixed trends across various commodity groups, with notable movements in cereals, vegetable oils, dairy, and sugar prices.

Cereal prices dropped by 3% in June, primarily due to decreasing global export prices for all major cereals. This decline was largely driven by seasonal pressures from ongoing harvests in the northern hemisphere, which particularly impacted wheat prices.

Meat prices showed little overall change. A decline in poultry meat prices was nearly offset by moderate to slight increases in the prices of ovine, pig, and bovine meats. This balance kept the meat price index relatively stable.

In contrast, vegetable oil prices surged by 3.1%, marking the highest level since March 2023. This increase was driven by higher quotations across palm, soy, and sunflower oils. The rise in vegetable oil prices reflects strong global demand and supply constraints in key producing regions.

Dairy prices rose by 1.2%, supported by higher quotations for palm, soy, and sunflower oils. In contrast, rapeseed oil prices remained virtually unchanged, contributing to the overall modest increase in the dairy price index.

Sugar prices increased by 1.9%, mainly due to lower-than-expected harvest results in May from Brazil. These results have heightened concerns over the potential impact of prolonged dry weather conditions on sugar production in the coming months, contributing to the upward pressure on prices.

In summary, the FAO Food Price Index holding steady at 120.6 in June 2024 reflects a complex interplay of global market dynamics. The significant decline in cereal prices was counterbalanced by rising vegetable oil prices and moderate increases in dairy and sugar prices. As global food markets continue to react to changing climatic conditions, seasonal harvests, and demand fluctuations, these commodity price trends will remain a focal point for analysts and policymakers.

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