Decline in global food prices
The global food price index showed a partial decline in May, but concerns over war and rising production costs keep anxieties fresh.
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Global food prices experienced a slight decline in May, primarily due to a decrease in the value of palm and soybean oils. However, increases in the prices of key agricultural inputs have kept the index just below the highest levels observed in a long time.
According to data from the Food and Agriculture Organization of the United Nations (FAO), the FAO Food Price Index averaged 130.8 points in May 2026. While this figure marks a small decline of 0.2 percent compared to the previous month, it represents a 2.9 percent increase compared to the same period last year.
Conflicts in Iran and disruptions in the Strait of Hormuz have hindered the global supply of critical agricultural inputs such as fuel and fertilizer, driving up production costs. Yield losses in countries where crops like corn and rice are grown have become a cause for concern. Additionally, palm oil prices moved downward after a five-month rise due to expected decreases in import demand and fluctuations in crude oil markets.
Boubaker Ben-Belhassen, Director of the FAO Markets and Trade Division, stated, “While global food commodity markets remain generally resilient, the rise in cereal prices highlights sensitivity to weather-related risks and disruptions in energy and input markets. The continued uncertainty affecting trade routes, including the Strait of Hormuz, could reduce fertilizer use and create additional pressure on food prices, underscoring the need for coordinated international action.”
The latest data indicated that the FAO Cereal Price Index rose by 2.6 percent compared to April and by 5.0 percent on an annual basis. In contrast, the FAO Vegetable Oil Price Index fell by 4.6 percent compared to April 2026, marking its first monthly decline of the year. A limited increase of 0.1 percent in the meat price index was noted. Dairy products experienced a 0.5 percent monthly decline, influenced by a decrease in international butter prices.
The upward trend in sugar prices continued. The decrease in the proportion of sugarcane allocated to sugar production in Brazil, a greater focus on ethanol production, and expectations that El Niño could negatively affect sugar production in India and Thailand next year led to a 7.5 percent increase in the index for May.
In Turkey, according to data released today by TUIK, there was a 0.48 percent decrease in food and non-alcoholic beverages in May. However, the annual increase rate was recorded at 34.86 percent.