FAO Food Price Index Up 1.6% in February as cereal gains remain modest

GLOBAL – The FAO Food Price Index, which monitors monthly changes in internationally traded food commodities, averaged 127.1 points in February, marking a 1.6% increase from January and an 8.2% rise compared to the same period in 2024.

While sugar and dairy prices led the surge, the FAO Cereal Price Index showed a modest increase of 0.7% from the previous month, reaching 112.6 points, according to the latest Food and Agriculture Organization of the United Nations (FAO) report.

Wheat and maize prices rise, rice prices drop

According to FAO, wheat prices edged higher in February due to tightening supplies in the Russian Federation and growing concerns over crop conditions in Eastern Europe and North America.

Similarly, global maize prices continued their upward trajectory, supported by tightening supplies in Brazil and robust export demand from the United States.

However, the global rice market showed a contrasting trend, with prices falling by 6.8% due to ample exportable supplies and weak import demand.

Looking ahead, FAO’s latest Cereal Supply and Demand Brief forecasts global wheat production in 2025 to reach 796 million tonnes, reflecting a modest 1% increase from the previous year.

This growth is attributed to anticipated production gains in the European Union, particularly in France and Germany, where soft wheat sowings have expanded. However, concerns remain over dry conditions in Eastern Europe and excessive rainfall in Western regions, which could limit yield improvements.

Meanwhile, global rice production is expected to hit a record 543 million tonnes (in milled equivalent) for the 2024/25 period, driven by favorable growing conditions in India, Cambodia, and Myanmar.

Despite this record forecast, weak demand could continue to keep international rice prices subdued in the coming months.

A slight decline in global reserves

FAO has raised its estimate for total global cereal production in 2024 to 2,842 million tonnes, reflecting a slight increase from the previous year.

However, global cereal utilization is forecast to rise to 2,867 million tonnes for the 2024/25 marketing year, marking a 1% increase from the previous period, largely fueled by record-high rice consumption.

Global cereal stocks are projected to decline by 1.9%, with ending stocks for 2025 estimated at 869.3 million tonnes. Higher stockpiles in the Russian Federation and Ukraine are expected to be offset by reductions elsewhere, bringing the global stocks-to-use ratio to 29.9%.

Despite the decline, FAO considers this level to still indicate a comfortable supply situation. However, global cereal trade is expected to contract by 5.6% to 484.2 million tonnes due to shifting export dynamics.

Production prospects vary across continents

FAO’s newly released Crop Prospects and Food Situation report highlights regional disparities in cereal production prospects for 2025.

 In Africa, North African countries face challenges due to prolonged dry weather, while Southern Africa is expected to see improved yields following a poor 2024 harvest.

In Asia, wheat production is forecast to expand in Far East Asia, supported by increased plantings and favorable weather. However, Near East Asia has been experiencing low rainfall since late 2024, potentially causing wheat harvests to fall below the five-year average.

In Latin America and the Caribbean, mixed weather conditions have created uncertainty for maize production. While Argentina faces the risk of stunt disease outbreaks, Brazil’s production is expected to remain strong, maintaining overall output at above-average levels.

In Central America, dry conditions in Mexico have led to reduced cereal plantings, though other regions are benefitting from favorable weather.

The FAO report also highlights severe food insecurity in 45 countries, with 33 in Africa, nine in Asia, two in Latin America and the Caribbean, and one in Europe requiring external assistance for food. Conflict and civil insecurity remain the primary drivers of hunger, with critical situations in Gaza (Palestine) and Sudan, where populations are facing acute food insecurity at IPC Phase 5 levels.

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