Global food prices rise in May, says FAO; sees Lower cereal production

ROME (Reuters)-World food prices increased for the fifth consecutive month in May, after the bad weather raised the prices of cheese and corn, the U.N. food agency said Thursday. The Food and Agriculture Organization (FAO) also warned that a sharp drop in the expected corn crop in the United States, affected by floods, decreased its previous forecast of global cereal production by 2019. The FAO food price index, which measures the monthly variations of a basket of cereals, oilseeds, dairy products, meat and sugar, recorded an average of 172.4 points last month against 170.3 points in April – its highest level since June last year. Advertising The FAO milk price index rose 5.2% in relation to the value of April, reaching a maximum of five years, with the cheese helping to raise the index thanks to the strong global demand for the product, as a drought in Oceania limited the region's export prospects. The FAO cereal price index rose 1.4% due to a sudden increase in the price quotes of maize after the planting of the crop has fallen to the slower pace already recorded in the United States due to widespread floods and rains. On the other hand, the sugar index fell 3.2% in the month and the price index of the vegetables fell 1.1%. In its second forecast for 2019, the FAO predicted that world cereal production will reach 2.685 billion tonnes, below the previous forecast of 2.722 billion tonnes, but still 1.2% above the 2018 levels when production fell.