New early-season forecasts are predicting another abundant global cereal harvest, despite the growing risks from El Ni\u00f1o<\/p>\n\n\n\n
The FAO Food Price Index, a benchmark for global food prices, dropped slightly in June. The decline in prices for cereals, sugar, and dairy products made up for the rise in prices for vegetable oils and meat, according to new data released Friday by the United Nations Food and Agriculture Organization (FAO).<\/p>\n\n\n\n
The FAO Food Price Index, which tracks the monthly changes in international prices of a basket of globally traded food products, averaged 130.3 points in June 2026, down 0.3% from May, but still 2.2% higher than its level a year earlier.”Although the global reference index for international prices of basic food commodities slightly decreased in June, the markets for each product continue to react differently to the evolving situation. In an increasingly uncertain global context, market transparency, rapid information sharing, and predictability in international trade remain essential to ensure food security and strengthen the resilience of food systems,” said Boubaker Ben-Belhassen, Director of the FAO’s Markets and Trade Division.The FAO cereal price index fell by 3.5% compared to May, due to lower international prices for corn and wheat, but it remains 2.7% higher than it was a year ago. Global wheat supplies dropped by 4.4%, as the quick harvests and favorable supply outlook in the Black Sea region offset concerns about crop prospects in Australia and the United States. The strength of the US dollar and weak energy markets, amid expectations of reduced tensions around the Strait of Hormuz, also put downward pressure. Global corn prices fell by 6.2%.reflecting the outlook of abundant supply in South American exporting countries and the slowdown in ethanol demand. On the other hand, the FAO rice price index rose by 3.2% in June, driven by stronger Asian demand for Indica rice. However, weather uncertainties and rising production, transport, and marketing costs have gradually supported the quotas for non-fragrant rice.<\/p>\n\n\n\n
The FAO vegetable oil price index, meanwhile, went up by 3.8% compared to May. The increase in palm and rapeseed oil quotas, driven by higher demand for biofuels due to regulations and the generally stable prices of sunflower oil, more than made up for the drop in soybean oil prices.<\/p>\n\n\n\n
The FAO meat price index rose by 0.5%, hitting a new record. International poultry meat prices went up, partly due to a temporary drop in domestic supply following production adjustments done in response to a previous overproduction situation. Pork and beef prices, on the other hand, fell.<\/p>\n\n\n\n
The FAO dairy price index fell by 1.5% compared to the previous month, reflecting lower prices for skimmed milk powder, whole milk powder, and butter, as well as the eleventh consecutive monthly drop in international cheese prices, with exports continuing to outpace global import demand.<\/p>\n\n\n\n
The FAO sugar price index dropped by 5.7% compared to May, due to falling ethanol prices in Brazil and the depreciation of the Brazilian real. Ongoing concerns about the potential impact of El Ni\u00f1o on sugar production in India and Thailand have slowed the overall decline in international sugar prices.Harvest outlooks remain favorable, but El Ni\u00f1o adds to the uncertainty.<\/p>\n\n\n\n
The FAO has also released updated forecasts for 2026 crops in its Cereal Supply and Demand Bulletin. Production is expected to be the second highest ever, although 1.9% lower than last year’s record.Global cereal production is now estimated at 2,983 million tons. Forecasts for secondary cereal production are close to last year’s level, supported by recent official estimates from Argentina, Brazil, mainland China, and Zambia, all of which report larger-than-expected harvests. Global wheat production is expected to drop by 4.3% to 806.5 million tons, as recent official data from Australia shows that the El Ni\u00f1o phenomenon is causing production to fall below the five-year average. Meanwhile, global rice production is expected to decline by 1.8% compared to its record high in 2025\/26.<\/p>\n\n\n\n
The FAO has downgraded its forecasts for global cereal use in 2026\/27, bringing it down to 2,961 million tons, due to an expected drop in global wheat use. FAO’s forecasts for global cereal stocks at the end of the 2027 campaigns are now at 957.8 million tons, keeping the overall cereal stocks-to-use ratio largely unchanged in 2027, at 32.0%. FAO’s forecasts for global cereal trade in 2026\/27 remain almost unchanged, at 507.6 million tons.The Agricultural Market Information System (AMIS), hosted by the FAO, also released its monthly market monitoring report on Friday. Describing agricultural markets as ‘generally stable,’ the report notes that while El Ni\u00f1o-related risks require close monitoring, the overall situation remains generally favorable.<\/p>\n\n\n\n
More details are available here.<\/p>\n\n\n\n
The Agricultural Market Information System (AMIS), hosted by the FAO, also released its monthly market update on Friday. Describing agricultural markets as “generally stable,” the report emphasizes that while El Ni\u00f1o-related risks require increased monitoring, the overall favorable crop conditions, abundant supplies, and ongoing harvest progress continue to support market confidence. The report also addresses the potential impact of the Hormuz crisis on agricultural markets.<\/p>\n\n\n\n
41 countries need external food aid due to conflicts and climate shocks.<\/p>\n\n\n\n
According to another report released today by the FAO’s Global Information and Early Warning System on Food and Agriculture (GIEWS), 41 countries and territories worldwide, including 31 in Africa, need external food aid.<\/p>\n\n\n\n
Conflicts and insecurity remain the main drivers behind the most severe levels of acute food insecurity. In addition, weather conditions linked to El Ni\u00f1o, combined with rising input costs, are limiting agricultural production prospects in East and West Africa. At the same time, in North and Southern Africa, where the main harvest is already finished, cereal production is expected to exceed five-year averages in 2026, with record harvests anticipated in some countries, according to the latest Crop Prospects and Food Situation report.Among the 39 low-income countries facing a food deficit, total cereal production is expected to rise by 1.4% during the 2026\/2027 season to reach 129 million tons, while their total cereal import needs are expected to grow by 2.0% to nearly 48 million tons.<\/p>\n\n\n\n
Source: fao.org<\/p>\n\n\n\n
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