Global food prices remained near their highest level in more than three years, as falling costs for palm and soybean oils offset disruptions in the supply of key agricultural inputs due to the war in Iran. This was reported by Bloomberg, according to UNN.
Details
The United Nations global food price index edged down 0.2% in May, as rising prices for grains and sugar were offset by falling costs for vegetable oils and dairy products, according to the Food and Agriculture Organization of the United Nations (FAO).
The war in Iran has blocked flows of fuel and fertilizer through the Strait of Hormuz, leading to a surge in prices for essential agricultural commodities. This has raised the cost of growing corn, rice, and other food products, while some of the world's leading producers are already warning of lower yields and production volumes.
After rising for five consecutive months, international palm oil prices declined, reflecting expectations of weaker global import demand and uncertainty in crude oil markets.
The FAO index tracks food commodities traded on international markets, meaning it may take more time before these price changes are reflected on grocery store shelves.
As a reminder
In May, the FAO index rose by 1.6% due to the blockade of the Strait of Hormuz and resource shortages. Vegetable oils, meat, and cereals saw the largest price increases.