A measure of global food commodity prices fell slightly for the second month in a row in May, despite the continued surge in wheat markets as the war in Ukraine dragged on.

The UN Food and Agriculture Organization’s monthly food price index remains 29% above May 2021 at 157.4 points after declining 0.6% last month, largely due to lower dairy and sugar prices. It was the second month in a row that the index has declined since hitting a record 159.3 points in March.

FAO’s index for grain prices rose 2.2% in May as wheat prices increased for the fourth consecutive month, rising 5.6% in May. Wheat prices are 56% higher than a year ago and only 11% below the record high in March 2008.

“The steep increase in wheat prices was in response to an export ban announced by India amidst concerns over crop conditions in several leading exporting countries, as well as reduced production prospects in Ukraine because of the war,” FAO said.

Prices for corn and other coarse grains were down 2.1% in May but still 18.1% higher than in May 2021.

“Export restrictions create market uncertainty and can result in price spikes and increased price volatility. The decrease in oilseeds prices shows how important it is when they are removed and let exports flow smoothly,” said FAO Chief Economist Máximo Torero Cullen.

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FAO’s measure of dairy prices fell 3.5% in May, the first decline in that index after eight consecutive monthly increases. Dairy prices were still 16.9% higher than in May 2021.

The index for vegetable oils declined 3.5% in May due to lower prices for palm, sunflower, soy and rapeseed (canola) oils.

“Apart from demand rationing, the removal of Indonesia's short-lived export ban on palm oil exerted additional downward pressure on prices, although a further price drop was contained by lingering uncertainties over the country's export prospects,” FAO said.

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