GLOBAL – The FAO Food Price Index, a benchmark for global food commodity prices, declined in January, averaging 124.9 points, representing a 1.6 percent drop from December levels.
This drop was primarily driven by significant decreases in the international prices of vegetable oils and sugar, according to a report released on February 7, by the Food and Agriculture Organization of the United Nations (FAO).
The index, which tracks monthly changes in the prices of a basket of globally traded food commodities, remains 6.2 percent higher than its level a year ago but is still 22.0 percent below its all-time peak reached in March 2022.
The FAO Vegetable Oil Price Index saw a notable 5.6 percent decline from December, reversing a recent upward trend. Despite this decrease, prices remained 24.9 percent higher than the same time last year. The drop was primarily driven by lower global prices for palm and rapeseed oils, while soy and sunflower oil prices remained stable.
Similarly, international sugar prices saw a notable decrease, contributing to the overall decline in the Food Price Index.
In contrast, the FAO Cereal Price Index rose by 0.3 percent from December but remained 6.9 percent lower than January 2024 levels.
Wheat export prices experienced a slight drop, while maize prices saw an uptick due to lower production and stock forecasts in the United States. The FAO All Rice Price Index fell by 4.7 percent in January, reflecting ample exportable supplies.
Cereal Supply and Demand Outlook
The FAO also released its latest Cereal Supply and Demand Brief, providing insights into global cropping trends for 2025.
Winter wheat planting in the northern hemisphere concluded in January, with early indications showing increased sowings in France, Germany, and the United Kingdom, but reduced plantings in the Russian Federation due to weather conditions.
Maize harvests in the southern hemisphere are set to begin in the second quarter of 2025. Early forecasts suggest improved yields in Argentina and Brazil. Record-high maize prices have prompted increased plantings in South Africa.
The FAO revised its forecast for global cereal utilization in 2024/25, now projected to rise by 0.9 percent to 2,869 million tonnes, driven primarily by increased maize use for animal feed.
However, world cereal stocks are predicted to decline by 2.2 percent by the close of the 2025 seasons, largely due to a significant contraction in U.S. maize stocks. Despite this, the global cereal stocks-to-use ratio is expected to remain at a “comfortable level” of 29.8 percent.
International cereal trade is projected to contract by 5.6 percent in 2024/25, reaching 483.5 million tonnes. This decline is primarily attributed to reduced demand from China for barley, maize, and wheat.
The FAO has also adjusted its global production forecast for 2024, lowering it to just under 2,841 million tonnes, a 0.6 percent decrease from 2023.
This revision reflects a significant reduction in maize output in the United States, where late-season moisture stress negatively impacted yields.
On the other hand, higher-than-expected official production estimates for rice in China, Mali, Nepal, and Vietnam have resulted in a new global rice output forecast of 539.4 million tonnes for 2024/25, marking a 0.9 percent annual increase and setting a new all-time high.
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