Global food commodity prices saw a notable decline in May, primarily due to falling prices in cereals and vegetable oils, according to a new report released by the Food and Agriculture Organization (FAO) of the United Nations. This drop offers some relief amid ongoing concerns about inflation and food insecurity in many parts of the world.
The FAO Food Price Index, which tracks the monthly changes in the international prices of commonly traded food commodities, averaged 120.4 points in May 2025, down 2.3% from April. The index is now 3.4% lower than the same period last year, highlighting a stabilizing trend after several years of volatility fueled by global conflicts, climate change, and economic disruptions.
The decline was mainly driven by drops in the Cereal Price Index and the Vegetable Oil Price Index, both of which fell more sharply compared to other food categories such as meat, dairy, and sugar.
Cereal prices, especially wheat and maize, declined due to increased global supplies and improved crop conditions in major producing countries like the United States, Russia, and parts of the European Union.
According to the FAO, wheat prices dropped significantly thanks to strong production forecasts in the Black Sea region and favorable weather in North America. Meanwhile, maize prices also dipped because of expected bumper harvests in Brazil and the U.S.
The International Grains Council (IGC) echoed similar findings, noting that “abundant export availability and steady logistics” helped ease pressure on the grain markets.
Vegetable oil prices recorded the sharpest drop among all food categories, falling 4.4% from April. The decrease was mainly driven by lower palm, soy, and sunflower oil prices. Improved production levels in key countries like Indonesia and Malaysia, as well as reduced global import demand, contributed to this drop.
Soy oil prices also fell amid strong crush volumes in South America, while sunflower oil prices declined thanks to competitive pricing from Black Sea exporters.
This downward movement in the vegetable oil market has been a consistent trend throughout early 2025, providing some hope for industries heavily dependent on edible oil as an input cost.
While the decline in commodity prices is a positive sign for food affordability, experts caution that it may take time for these savings to reach consumers. Factors such as transportation costs, processing, packaging, and retail markups often delay the pass-through of price drops.
According to a recent update from the World Bank, “The recent drop in global food prices could bring some relief to low- and middle-income countries battling food inflation, but domestic conditions and supply chains will determine how quickly benefits are realized.”
Additionally, fluctuations in currency exchange rates, fuel prices, and government trade policies could influence how these global trends affect local economies.
The FAO report noted that while cereals and oils pulled the overall index down, other food categories such as dairy and meat remained relatively stable, with minor increases.
Agricultural analysts believe that the outlook for global food commodity prices remains cautiously optimistic. If weather conditions stay favorable and there are no major geopolitical shocks, prices may continue to trend downward or remain stable through the second half of 2025.
However, experts warn against overconfidence. “We’re still seeing fragile supply chains and ongoing risks from climate events like El Niño, which can alter crop production patterns globally,” said an economist at the International Food Policy Research Institute (IFPRI).
The recent price drops could provide some fiscal room for governments dealing with high food import bills. Nations that rely heavily on cereal and oil imports—such as those in Sub-Saharan Africa, South Asia, and parts of Latin America—might benefit the most.
To ensure lasting benefits, policy experts recommend:
The FAO has also urged countries to continue monitoring market developments closely and maintain strategic grain reserves to buffer against future shocks.
May’s decline in global food commodity prices, led by cereals and oils, is an encouraging signal that international markets are gradually stabilizing. For consumers worldwide, especially in vulnerable regions, this trend brings some hope for relief from the pressure of high food costs.
Still, with ongoing climate uncertainties, regional conflicts, and economic imbalances, the path ahead remains uncertain. Governments, international organizations, and the private sector must stay vigilant and proactive in supporting food security for all.
For a full breakdown of the FAO’s May report, you can view the detailed analysis on their official Food Price Index dashboard.
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