Blog Post

Food Prices Decline in January But Potential Shocks Remain






The FAO Food Price Index continued its decline in January, driven mainly by falling cereal and meat prices. The January 2024 Index was 10.4 percent below its January 2023 level.

The Cereal Price Index fell by 2.2 percent month-to-month and 18.6 percent from its previous year’s level. Declining wheat prices were driven by strong export competition and recent harvests, while maize prices fell due to harvests in Argentina and larger-than-anticipated supplies in the U.S. Rice prices, on the other hand, rose by 1.2 percent in January due to increased trade.

The Vegetable Oil Price Index rose marginally by 0.1 percent in January; the Index remained 12.8 percent below its January 2023 level, however. Palm and sunflower seed prices drove the overall increase, rising due to lower production and increased demand, respectively. Soy prices declined due to increased production prospects in South America.

The Dairy Price Index remained largely unchanged in January from the previous month and nearly 18 percent lower than its January 2023 level. The Meat Price Index declined by 1.4 percent from December and by 1.2 percent from January 2023, while the Sugar Price Index rose by 0.8 percent month-to-month and 15.9 percent year-to-year.

The latest AMIS Market Monitor also reflects declining prices for most commodities, reporting that wheat, maize, and soybean markets all experienced the lowest prices seen in the past two years in January. However, the report cautions, trade disruptions in the Panama Canal and Red Sea could bring environmental and food security shocks throughout 2024, including higher food prices and increased greenhouse gas emissions.

Wheat production forecasts for 2023 rose slightly in January but remain around 2 percent below 2022 harvests. Wheat utilization forecasts rose due to increased feed use in the EU. Total utilization is expected to be 2 percent above the previous year’s level. Wheat trade expectations for 2023-2024 increased due to rising demand from Brazil and China and increased export prospects for Ukraine, but overall trade is expected to be below the previous year’s level. Global wheat ending stocks are expected to fall by 1.1 percent from their opening levels.

Maize production forecasts rose in January, with production expected to be 5.2 percent above 2022 levels. Utilization forecasts also increased slightly due to higher feed use; utilization is now expected to increase by 1.5 percent from the previous year. Increased purchases by China and higher sales in several countries drove trade forecasts up, and global maize ending stocks are now expected to reach 10.3 percent above their opening levels.

Global rice production forecasts fell slightly in January. Utilization forecasts rose, but overall utilization is still expected to remain virtually unchanged from its 2022-2023 level. Global rice trade expectations declined due to lower imports from Nepal and Nigeria and lower exports by India. Global rice ending stock forecasts fell slightly in January as well, but overall ending stocks are still expected to be 1.1 percent higher than in 2022.

Soybean production forecasts remained stable in January, as did utilization. Overall utilization is expected to be 5.8 percent higher than 2022-2023 levels. Soybean trade forecasts increased slightly in January due to higher imports by China and higher exports by Argentina and the U.S. Global soybean ending stock prospects fell in January based on expected stock releases in Brazil; however, global ending stocks are still expected to be 13 percent higher than their opening levels.


Fertilizer prices were mixed in January, with nitrogen prices increasing and potash prices declining slightly. DAP prices also remain higher than other types of fertilizer due to export restrictions in China. Natural gas prices rose in the U.S. but declined in Europe.