FAO Food Price Index Continues Five-Month Decline

The FAO Food Price Index fell in January for the fifth straight month, to nearly 23 percent below the record high seen in March 2022. Sugar, meat, and dairy prices drove the decline.

The Cereal Price Index rose marginally in January but is still nearly 4 percent below its January 2025 level. Wheat prices fell 0.4 percent, with strong global supplies balancing growing demand and concerns about weather in several major producing regions. Strong supplies drove maize prices down slightly as well. Rice prices increased by nearly 2 percent due to increased demand.

The Vegetable Oil Price Index rose 2.1 percent in January to reach 10.2 percent above January 2025 levels. Soy oil prices rose based on reduced export supplies from South America and growing demand from the biofuel sector. Palm oil prices also increased due to seasonally slowing production in Southeast Asia and growing global demand, while sunflower oil prices rose on limited supplies from the Black Sea.

The Meat, Dairy, and Sugar Price Indices all fell in January, by 0.4, 5, and 1 percent, respectively.

The latest AMIS Market Monitor also reports generally ample global supplies for most major commodities and points to a cautiously stable outlook for the coming year. The report highlights factors that have allowed the global food system to remain fairly resilient in the face of trade policy uncertainties and geopolitical tensions: factors including long-term gains in agricultural productivity, generally favorable weather conditions, diversified trade flows, and expanded stocks for wheat and other major staple foods. These factors are not guaranteed to remain in place, however, and the report emphasizes the need to continue enhancing market transparency and maintaining open trade channels and cooperative policies.   

Wheat production forecasts rose to a record high in January based on increased production estimates from Argentina and Australia. Utilization forecasts increased slightly based on increased feed use. Wheat trade forecasts also rose in January, but overall trade for 2025 is expected to remain below 2023-2024 levels. Global wheat ending stock prospects increased based on large harvests from several major producers.

Maize production forecasts for 2025 increased in January due to larger area planted and better yields in several major producers. Maize utilization forecasts grew based on increased feed use. Trade prospects and global maize ending stock prospects also rose in January, with stocks expected to be 10 percent above the previous year’s level.

Rice production prospects rose in January based on increased crop prospects in several countries. Increased non-food use drove rice utilization forecasts up, while trade for 2026 is expected to fall by 0.6 from 2025 based on reduced purchases throughout Asia. Global rice ending stock forecasts increased based on higher inventories in several countries.

Soybean production forecasts remained stable in January, while utilization forecasts rose slightly based on increased crushing expectations in India and the United States. Trade forecasts also remained stable. Global soybean ending stocks rose based on reduced exports and thus higher inventory accumulation in the United States.

Fertilizer prices eased for the most part in January. However, natural gas prices spiked in both Europe and the United States, and urea prices rose from December as a result.

Sara Gustafson is a freelance writer.