Global food prices see decline as January index drops

Source: Freepik

The index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, was 6.2% higher than its corresponding level one year ago but remained 22.0% below its peak reached in March 2022.

The sugar price index was down 6.8% from December and 18.5% from its year-earlier level, mainly due to improved global supply prospects as a result of generally favourable weather in Brazil and the Indian government’s decision to resume sugar exports.

The vegetable oil price Index decreased by 5.6% from the previous month, reversing a recent increase, though it remained 24.9% higher than a year ago. The decline in January was mainly driven by lower world prices of palm and rapeseed oils, while those for soy and sunflower oils remained stable.

The meat price index also dropped, falling by 1.7% in January, as lower international ovine, pig and poultry meat prices outweighed an increase in bovine meat quotations.

Meanwhile, the cereal price index increased by 0.3% from December but remained 6.9% below its January 2024 level. Wheat export prices dropped only slightly, while maize prices increased, partly due to lower production and stock forecasts for the United States of America.

The all rice price index declined by 4.7% in January amid ample exportable supplies.

The dairy price index increased by 2.4% from December and was up 20.4% from its January 2024 level. The rise was driven by a 7.6%monthly surge in international cheese quotations, which outweighed declines in butter and milk powder prices.

New forecasts for major cereal crops in the year ahead

FAO also released a new Cereal Supply and Demand Brief on Friday, with fresh insights on cropping trends in 2025.

The winter wheat planting season in the northern hemisphere concluded in January, with early indications pointing to increased sowings in France, Germany and the United Kingdom and a reduction in the Russian Federation, all influenced by weather conditions.

Maize harvests in the southern hemisphere will begin in the second quarter of 2025, with early indications suggesting improved yields in Argentina and Brazil, while record-high maize prices have driven an increase in plantings in South Africa.

FAO has raised its forecast for world cereal utilization in 2024/25, now estimated to rise by 0.9% to 2 869 million tonnes, primarily driven by higher expected use of maize for animal feed.

World cereal stocks are now predicted to decline by 2.2% by the close of seasons in 2025, mostly due to an anticipated significant contraction in maize stocks in the United States of America. The global cereal stocks-to-use ratio in 2024/25 is expected to fall but remain at a “comfortable level” of 29.8%.

International trade in cereals in 2024/25 is forecast to contract by 5.6% compared to the previous year to 483.5 million tonnes, largely due to lower demand from China for barley, maize and wheat.

FAO has also revised its forecast for global production in 2024, lowering it to just under 2 841 million tonnes, a 0.6% drop from 2023. The new forecast reflects a significant reduction in maize output in the United States of America, where late-season moisture stress curbed yields.

At the same time, official production estimates for rice in China, Mali, Nepal and Vietnam have come in higher than anticipated, resulting in a new global rice output forecast of 539.4 million tonnes in 2024/25, a 0.9% annual increase and an all-time high.

The Agricultural Market Information System (AMIS), hosted by FAO, also released its monthly Market Monitor on Friday, 7 February 2025.

In addition to the regular market analysis, the report’s feature article highlights a study of 144 major crops over the 1961-2021 period, finding no evidence of long-term deceleration in global yield growth, while urging the development of cultivars resilient to temperature and precipitation variations.