Maize led global cereals prices up in May as Brazil production bit; palm oil up

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Rising international maize prices pushed the overall costs of cereals up in May, the Food and Agriculture Organization (FAO) said in its latest monthly report, adding that downgraded production prospects for Brazil added pressure to already tight global supplies amidst sustained strong demand.

Maize prices gained 12.9 points (8.8 percent) in May, reaching 75.6 points (89.3 percent) above their value last year and their highest level since January 2013, but prices began retreating towards the end of the month mostly in expectation of higher production prospects in the United States.

International barley and sorghum prices also increased in May, rising by 5.4 percent and 3.6 percent, respectively, the FAO said, adding that following a surge in wheat prices in early May, improved crop conditions, particularly in the European Union and the United States, led to sharp price declines by the end of the month.

“However, wheat prices still averaged 8.0 points (6.8 percent) up from April and 27.7 points (28.5 percent) above May 2020. International rice prices held steady in May, with logistics and shipping costs keeping trading activity subdued through the month,” it said.

The continued strength of the vegetable oil price index, which marked a 12th consecutive monthly rise, mainly reflects rising palm, soy and rapeseed oil values.

“International palm oil quotations remained on an upward trajectory in May and reached their highest level since February 2011, as slow production growth in Southeast Asian countries, together with rising global import demand, kept inventories in leading exporting nations at relatively low levels,” the report said.

As for soy oil, prospects of robust global demand, especially from the biodiesel sector, lent support to prices, while international rapeseed oil values were underpinned by continued global supply tightness, it added.

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