Staple food prices stable in August, but concerns over fertilizer prices, trade uncertainties remain

Global staple food prices remained largely stable in August, according to the latest FAO Food Price Index. The Index was nearly 7 percent higher than its August 2024 level but still well below the record high seen in March 2022.

The Cereal Price Index fell marginally in August. Wheat prices declined due to ample supplies and slowing import demand. Rice prices also fell by 2 percent due to strong exporter competition. Maize prices were the outlier in August, rising for the third consecutive month due to weather concerns in the European Union and rising demand for feed and biofuel production.

The Vegetable Oil Price Index rose 1.4 percent in August to reach its highest level since July 2022. Palm oil prices increased due to strengthened import demand and changing biodiesel blending policies in Indonesia. Soybean oil prices dropped, on the other hand, due to strong supply prospects.

The Meat and Sugar Price Indices both rose in August, by 0.6 and 0.2 percent respectively, while the Dairy Price Index fell by 1.3 percent.

The latest AMIS Market Monitor reflects the same trends for staple commodities and emphasizes that continuing shifts in trade and biofuel production policies are still creating market uncertainty despite generally strong production prospects.

Wheat production prospects for 2025 declined slightly from July but are still expected to be above 2024 levels. Utilization is expected to reach a record high due to increased feed use in several countries, while trade is also expected to increase due to rising demand. Wheat ending stocks are forecast to be near their opening levels.

Maize production forecasts for 2025 increased in August, with total production expected to be 6.4 percent above 2024 levels. Maize utilization forecasts also increased due to rising feed use, while trade prospects rose due to strong supplies and expected higher import demand. Global maize ending stocks are expected to increase from their opening levels.

Rice production prospects fell slightly in August, while utilization forecasts remained largely stable. Rice trade prospects increased due to higher imports. Global rice ending stocks are expected to reach a record high.

Soybean production prospects declined slightly in August due to expected falling production in the United States. Utilization prospects remained stable in August, while trade prospects fell marginally but are still expected to be above their 2024-2025 levels. Global soybean ending stock prospects also declined in August due to inventory drawdowns in China, but overall ending stocks are still expected to reach near-record levels in 2025.

Fertilizer markets continue to be negatively impacted by trade uncertainties. The Market Monitor also reports that fertilizers are becoming less affordable to farmers when compared with crop prices, which could negatively impact demand and lower fertilizer usage. Natural gas prices generally declined in August due to rising supplies and mild weather in many regions, while tightened supplies drove ammonia prices up. Nitrogen fertilizer prices rose in August due to unusually strong import demand from India, while phosphorus and potassium prices remained relatively stable.

Sara Gustafson is a freelance writer.