FAO Food Price Index unchanged in March 2025, up 6.9% YoY
According to FAO, this stability was largely driven by opposing trends in key commodity categories: falling prices for cereals and sugar offset a notable rise in vegetable oil prices.
GLOBAL – The FAO Food Price Index remained stable in March 2025, averaging 127.1 points, unchanged from February. This marks a 6.9% increase compared to March 2024, but the index remains 20.7% below its peak in March 2022.
According to FAO, this stability was largely driven by opposing trends in key commodity categories: falling prices for cereals and sugar offset a notable rise in vegetable oil prices.
The FAO Cereal Price Index declined by 2.6% in March 2025, reflecting a broader global trend of weaker wheat and maize prices.
Wheat prices, in particular, decreased as concerns over crop conditions in major Northern Hemisphere exporting countries eased, although currency movements moderated this drop.
The FAO All-Rice Price Index also fell by 1.7%, attributed to weak import demand and ample exportable supplies, continuing the downward trend for the crop.
In contrast, the FAO Vegetable Oil Price Index surged by 3.7%, driven by rising quotations for palm, soy, rapeseed, and sunflower oils.
According to FAO, the increase in vegetable oil prices was largely a result of robust global import demand, raising the index by 23.9% year-on-year.
The FAO also released updated forecasts for cereal production and demand. The estimate for global cereal production in 2024 stands at 2,849 million tonnes, marking a slight 0.3% year-on-year decrease, though it is higher than previous forecasts due to larger-than-expected wheat harvests in Australia and Kazakhstan.
Rice production for the 2024/25 season is forecasted to increase by 1.6% to 543.3 million tonnes, driven by expanded plantings.
Looking ahead to 2025, global wheat production is expected to remain steady at 795 million tonnes. The EU is predicted to see a 12% rise in wheat output following a weather-induced decline in 2024, while wheat production in regions like Argentina, Egypt, and India is expected to increase.
In contrast, Australia, the U.S., and parts of Near East Asia are forecasted to see a decline in production.
Global cereal utilization is forecast to rise by 0.9% to 2,868 million tonnes, driven by a record-high demand for rice.
However, world cereal stocks are expected to fall by 1.5% to 873.3 million tonnes by 2025, primarily due to a significant contraction in coarse grain stocks. On a positive note, global wheat and rice inventories are predicted to increase, maintaining an overall comfortable level of supply.
Lower trade forecasts amid reduced purchases
FAO’s updated forecasts also predict a reduction in world cereal trade for 2024/25. The forecast has been lowered by 5.3 million tonnes to 478.9 million tonnes, marking a 6.7% contraction from the previous year.
The reduced trade outlook is primarily attributed to lower expected purchases by China, particularly of coarse grains and wheat. This decline in global trade is the lowest level seen since 2019/20.
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