Global food prices edged lower in May, marking a modest decline from April as falling vegetable oil prices offset gains in cereals and sugar, according to the Food and Agriculture Organization (FAO).

Key Highlights

• The FAO Food Price Index averaged 130.8 points in May.
• Prices fell 0.2% from April's revised reading of 131.0.
• The index remained 2.9% higher than a year ago.
• Food prices are still 18.4% below the record peak reached in March 2022.

Cereals Continue to Rise

Cereal prices climbed 2.6% during May.

Wheat

• Rose for the fourth consecutive month.
• Supported by weaker export harvest prospects, particularly in the United States.
• Higher fuel and fertilizer costs linked to Middle East tensions also increased production expenses.

Corn (Maize)

• Benefited from stronger global import demand.
• Supplies tightened in key producing countries including Brazil and the United States.

Vegetable Oil Prices Retreat

Vegetable oil prices declined for the first time in 2026, helping pull the overall food index lower.

However, prices remain more than 20% higher than a year ago because elevated energy prices have boosted demand for biofuel feedstocks such as:

• Palm oil
• Soybean oil
• Rapeseed oil
• Sunflower oil

Sugar Posts Strong Gain

Sugar prices jumped 7.5% month-over-month to 95.1 points.

Despite the increase:

• Sugar prices remain 13.1% lower than a year earlier.
• Markets are increasingly concerned about tighter global sugar supplies in the coming months.

FAO Cuts Global Cereal Production Outlook

In a separate report, the FAO projected that world cereal production for the 2026/27 season will decline by approximately 2% to 2.98 billion metric tons.

Expected trends include:

• Wheat production seeing the largest percentage decline.
• Rice output easing from record levels.
• Corn and barley experiencing smaller decreases.
• Overall production remaining historically high despite the expected drop.

Market Implications

The report suggests that while overall food inflation has stabilized, several important risks remain:

• Elevated energy costs continue to affect agricultural production and transportation.
• Geopolitical tensions in the Middle East are increasing fertilizer and fuel expenses.
• Lower projected grain harvests could tighten supplies later in the year.
• Rising sugar and cereal prices may place renewed pressure on food-importing nations.

Bottom Line

Global food prices softened slightly in May, but the decline was modest. Strong gains in wheat, corn, and sugar indicate that supply concerns and higher energy costs continue to influence agricultural markets. With the FAO forecasting lower cereal production next season, food markets may remain vulnerable to further price volatility in the months ahead.