Benchmark for world food commodity prices down in January

The FAO Food Price Index, the benchmark for world food commodity prices, declined in January, averaging 124.9 points during the month, down 1.6 percent from its December level. The drop was driven by significant decreases in the international quotations for vegetable oils and sugar, the Food and Agriculture Organization of the United Nations (FAO) reported Friday. 

The index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, was 6.2 percent higher than its corresponding level one year ago but remained 22.0 percent below its peak reached in March 2022.

The FAO Sugar Price Index was down 6.8 percent from December and 18.5 percent from its year-earlier level, mainly due to improved global supply prospects as a result of generally favourable weather in Brazil and the Indian Government’s decision to resume sugar exports.

The FAO Vegetable Oil Price Index decreased by 5.6 percent from the previous month, reversing a recent increase, though it remained 24.9 percent higher than a year ago. The decline in January was mainly driven by lower world prices of palm and rapeseed oils, while those for soy and sunflower oils remained stable.

The FAO Meat Price Index also dropped, falling by 1.4 percent in January, as lower international ovine, pig and poultry meat prices outweighed an increase in bovine meat quotations.Meanwhile, the FAO Cereal Price Index increased by 0.3 percent from December but remained 6.9 percent below its January 2024 level.

Wheat export prices dropped only slightly, while maize prices increased, partly due to lower production and stock forecasts for the United States of America. The FAO All Rice Price Index declined by 4.7 percent in January amid ample exportable supplies.

The FAO Dairy Price Index increased by 2.4 percent from December and was up 20.4 percent from its January 2024 level. The rise was driven by a 7.6 percent monthly surge in international cheese quotations, which outweighed declines in butter and milk powder prices.

New forecasts for major cereal crops in the year ahead

FAO also released a new Cereal Supply and Demand Brief on Friday, with fresh insights on cropping trends in 2025.

The winter wheat planting season in the northern hemisphere concluded in January, with early indications pointing to increased sowings in France, Germany and the United Kingdom and a reduction in the Russian Federation, all influenced by weather conditions.

Maize harvests in the southern hemisphere will begin in the second quarter of 2025, with early indications suggesting improved yields in Argentina and Brazil, while record-high maize prices have driven an increase in plantings in South Africa.

FAO has raised its forecast for world cereal utilization in 2024/25, now estimated to rise by 0.9 percent to 2 869 million tonnes, primarily driven by higher expected use of maize for animal feed.

World cereal stocks are now predicted to decline by 2.2 percent by the close of seasons in 2025, mostly due to an anticipated significant contraction in maize stocks in the United States of America. The global cereal stocks-to-use ratio in 2024/25 is expected to fall but to still remain at a “comfortable level” of 29.8 percent.

International trade in cereals in 2024/25 is forecast to contract by 5.6 percent compared to the previous year to 483.5 million tonnes, largely due to lower demand from China for barley, maize and wheat.

FAO has also revised its forecast for global production in 2024, lowering it to just under 2 841 million tonnes, a 0.6 percent drop from 2023. The new forecast reflects a significant reduction in maize output in the United States of America, where late-season moisture stress curbed yields.

At the same time, official production estimates for rice in China, Mali, Nepal and Viet Nam have come in higher than anticipated, resulting in a new global rice output forecast of 539.4 million tonnes in 2024/25, a 0.9 percent annual increase and an all-time high.

The Agricultural Market Information System (AMIS), hosted by FAO, also released its monthly Market Monitor on Friday. In addition to the regular market analysis, the report’s feature article highlights a study of 144 major crops over the 1961-2021 period, finding no evidence of long-term deceleration in global yield growth, while urging the development of cultivars resilient to temperature and precipitation variations.