FAO Cereal Price Index rose by 3% in September, driven by higher wheat, corn export prices

GLOBAL – The global food commodity market saw its sharpest price increase in 18 months this September, driven by significant upward trends across all major food categories.

According to a report by the United Nations Food and Agriculture Organization (FAO), the FAO Food Price Index averaged 124.4 points in September 2024, reflecting a 3% increase from August and a 2.1% rise from the same period in 2023.

The index, which tracks monthly changes in the international prices of a basket of commonly traded food commodities, highlights rising concerns over agricultural supply disruptions, volatile weather patterns, and shifting trade policies in key producing countries.

The Cereal Price Index increased by 3% during the month, led by higher wheat and corn export prices.

International wheat prices increased due largely to concerns over excessively wet conditions in Canada and the European Union. However, this was partly offset by competitively priced supplies from the Black Sea region. World corn prices also rose, influenced by low water levels on key transportation routes along the Madeira River in Brazil and the Mississippi River in the United States.

The FAO All Rice Price Index declined by 0.7%, partly reflecting generally quiet trading activities.

The FAO Vegetable Oil Price Index increased by 4.6% from August, with higher quotations for palm, soy, sunflower, and rapeseed oils. The rebound in soy oil quotations was primarily due to lower-than-expected crushings in the United States.

In a separate report, the FAO raised its forecast for global cereal production in 2024 to 2.853 billion tonnes, reflecting upward revisions to rice and wheat output that outweighed a small reduction to global coarse grains production.

The new figure, also published on Oct. 4 in the new Cereal Supply and Demand Brief, remains moderately below the record output of 2023.

World wheat production is expected to increase by 0.5% from the previous year, as improved yield prospects in Australia more than compensate for a significant cut to the European Union’s forecast due to excessively wet conditions.

By contrast, global production of coarse grains is expected to decline by 0.8% from 2023, with smaller crops in the European Union expected to outweigh higher corn output in the United States. World rice production in 2024-25 is forecast to rise by 0.9% and reach a record high of 539.2 million tonnes.

World cereal total utilization is forecast to rise by 0.4% to 2.853 billion tonnes, while global cereal stocks are predicted to expand by 1.2%, with rice stocks seen increasing three times faster.

According to the report, the Sugar Price Index registered the largest increase in September, rising by 10.4% due to worsening crop prospects in Brazil and concerns that India’s decision to lift restrictions on sugar cane use for ethanol production may affect export availability from the country.

This results in a global cereal stocks-to-use ratio of 30.6%, which the FAO considers “adequate supply prospects in the new season.”

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