FAO cereal price index rises in December on wheat, maize support

GLOBAL – Global cereal prices moved higher in December, interrupting an otherwise soft trend in agricultural markets, as renewed concerns over wheat exports and strong demand for maize pushed the FAO Cereal Price Index (CPI) upward, according to the latest monthly report from the Food and Agriculture Organization (FAO) of the United Nations.

The CPI averaged 107.3 points in December, an increase of 1.8 points, or 1.7%, from November.

The rise came even as the broader FAO Food Price Index fell for a fourth consecutive month, underscoring the distinct market dynamics currently shaping grain trade compared with other food commodity sectors.

Wheat prices were a key driver behind the monthly increase. The FAO said renewed concerns about export flows from the Black Sea region lent support to international quotations.

Ongoing geopolitical uncertainty continues to influence trade sentiment, given the region’s importance to global wheat supplies.

However, the FAO stressed that wheat markets remain fundamentally well supplied. Confirmation of large harvests in Argentina and Australia reinforced downward pressure, limiting the scale of price gains and keeping overall market sentiment cautious.

Maize markets provided firmer support to the cereal index. World maize prices were boosted by strong export demand alongside robust domestic ethanol production in both Brazil and the United States.

In the US, sustained biofuel demand continues to underpin corn usage, while Brazil’s expanding role as a major exporter has kept shipments active. These factors combined to tighten near-term availability in key export channels, supporting international prices.

Sorghum prices also moved higher during the month, tracking gains in maize. The FAO noted that this occurred despite a slow pace of sales to China, the world’s leading sorghum importer.

The linkage between maize and sorghum markets remains strong, particularly in feed applications, where substitution effects can quickly transmit price signals across grains.

Rice markets added further upward pressure within the cereal complex. The FAO All Rice Price Index rose by 4.3% in December, with prices increasing across all rice market segments.

The FAO attributed the rise to reduced harvest pressure, improved demand, and supportive policy measures in some producing countries.

These short-term factors tightened availability in spot markets, lifting prices despite a generally well-supplied global backdrop.

Despite the December increase, the FAO Food Price Index (FFPI), which tracks monthly changes in the international prices of a basket of globally traded food commodities, averaged 124.3 points in December.

This was slightly below the November level, reflecting declines in dairy products, meat and vegetable oils that outweighed increases in cereals and sugar.

The index stood 2.3% lower than a year earlier and remained about 22% below the record high reached in March 2022, when global markets were disrupted by the early stages of the Black Sea conflict.

For the full year 2025, the CPI averaged 107.9 points, down 4.9% from 2024 and marking the lowest annual average since 2020.

This reflects ample global production, comfortable stock levels, and intense competition among major exporters, particularly for wheat, maize and rice.

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