Overview
- The FAO Food Price Index averaged 130.8 in May, down 0.2% from April but 2.9% higher than a year earlier and near its highest level since January 2023.
- The cereals sub‑index rose 2.6% month‑on‑month to a 19‑month high with global wheat up 3.4% and maize up 1.9% as input costs and smaller harvest prospects pushed prices higher.
- The FAO linked higher cereal costs to rising fuel and fertiliser prices after the effective closure of the Strait of Hormuz, noting about 40% of fertiliser supply comes from the Middle East and that reduced fertiliser use could follow.
- Other markets diverged in May: vegetable oil prices fell 4.6% for the month but remained more than 20% above 2025 levels due to biofuel demand, while sugar jumped 7.5% on El Niño production concerns.
- The FAO projects world cereal production to fall about 2% in 2026/27 and urged coordinated action to limit supply tightening that would hit import‑dependent and low‑income countries and raise consumer food bills.