World food prices fell in June, for the first time in 12 months

World food prices fell in June, for the first time in 12 months. The reason was a reduction in the prices of vegetable oils, cereals and dairy products. The Food and Agriculture Organization of the United Nations (FAO) announced this on Thursday. The Rome-based FAO also said in a statement that the world's cereal harvest would reach almost 2.817 billion tonnes in 2021, slightly below initial estimates. The organization said on Thursday that the food price index, which tracks month-on-month changes in a food basket consisting of cereals, oilseeds, dairy products, meat and sugar, fell to 124.6 points in June from a revised 127.8 points in May (instead of 127.1 points in the preliminary estimate). In a year-on-year comparison, the value of the index in June was 33.9% higher than last year. FAO data also show that the vegetable oil price index fell by 9.8% in June, partly due to a fall in palm oil prices due to the expected increase in production. Soybean and sunflower oil prices also fell. The cereal price index fell by 2.6% month-on-month in June, but rose by 33.8% year-on-year. Corn prices fell by 5% compared to May, partly due to higher-than-expected yields and better prospects for the US harvest. Rice prices also fell in June, hitting a 15-month low as high shipping costs and a lack of containers limit its exports, the FAO said. Dairy prices fell by 1% month-on-month, with all components of the index falling, most notably butter prices due to weaker global demand and a slight increase in stocks, especially in Europe. The sugar price index recorded a month-on-month increase of 0.9%, reaching its highest level since March 2017. The FAO said prices pushed up uncertainty about the impact of adverse weather conditions on crops in Brazil, the world's largest sugar exporter. The meat price index increased by 2.1% compared to May, as the increase in imports from some East Asian countries offset the slowdown in meat purchases in China.