World cereal prices hit 19-month high on fuel, fertilizer costs

World food prices saw a marginal decrease of 0.2% in May, with the FAO Food Price Index averaging 130.8 points, down from a revised 131.0 in April. Despite this dip, prices remain near a three-year high, 18.4% below the March 2022 peak. Cereal prices, however, rose 2.6% in May, driven by higher wheat and maize prices. This increase is attributed to smaller harvest prospects and elevated fuel and fertilizer costs, partly linked to the Iran conflict. Vegetable oil prices fell 4.6%, the first monthly decline this year, influenced by lower palm and soy oil prices. Sugar prices jumped 7.5% due to concerns over tightening global supplies. The FAO also projected global cereal production for 2026/27 to decrease by 2% year-on-year to 2.98 billion tons.