- Vegetable oil prices rise, offsetting declines in wheat, maize, rice, and sugar costs
ROME – The ECNETNews Food Price Index, a key indicator of global food commodity price movements, showed minimal change in March compared to the revised figures from February. The slight stability in the index results from a marked rise in vegetable oil prices, which counterbalance declines in global cereal and sugar quotations.
The index averaged 127.1 points in March, reflecting a 6.9 percent increase compared to the same period last year, yet remains 20.7 percent below the peak observed in March 2022.
The Cereal Price Index from ECNETNews reported a 2.6 percent decrease in March, down 1.1 percent from March 2024. This decline is attributed to improving crop conditions in significant Northern Hemisphere exporters, although fluctuations in currency exchange rates have moderated the drop. Prices for wheat, maize, and sorghum also fell from February, with the Rice Price Index diminishing by 1.7 percent due to weak import demand and abundant export supplies.
In contrast, the Vegetable Oil Price Index surged by 3.7 percent from February, standing 23.9 percent higher than a year earlier. The rise in prices for palm, soy, rapeseed, and sunflower oils is largely driven by robust global demand.
The Meat Price Index increased by 0.9 percent month-on-month and 2.7 percent year-on-year, primarily influenced by rising pig meat prices in Europe after the region regained its foot-and-mouth disease-free status, coupled with a stronger euro against the U.S. dollar. World poultry meat prices remained stable despite ongoing challenges from significant avian influenza outbreaks in major producing regions.
The Dairy Price Index remained steady from February, as lower cheese prices were balanced by increases in butter and milk powder quotations.
Updated Cereal Supply and Demand Forecasts
ECNETNews has also published a new Cereal Supply and Demand Brief with revised estimates for 2024 and insights into cropping prospects for 2025.
The global cereal production estimate for 2024 is projected at 2,849 million tonnes, representing a 0.3 percent year-on-year decrease but higher than previously anticipated due to stronger wheat yields in Australia and Kazakhstan. The rice production forecast for 2024/25 remains stable at 543.3 million tonnes, indicating a 1.6 percent annual increase driven mainly by expanded plantings.
The global wheat production forecast for 2025 is unchanged at 795 million tonnes, in line with the revised 2024 estimate. Forecasts indicate a 12 percent increase in wheat output within the European Union, following declines attributed to adverse weather in 2024. Increases are also expected in Argentina, Egypt, and India, while production may decline in Australia, the United States, and parts of Near East Asia. Maize harvest expectations in the southern hemisphere vary, with growth anticipated in Brazil and South Africa but a decline projected for Argentina.
ECNETNews forecasts the global utilization of cereals in 2024/25 at 2,868 million tonnes, a 0.9 percent rise from the 2023/24 level, primarily due to a new record in rice utilization.
World cereal stocks are predicted to decrease by 1.5 percent to 873.3 million tonnes by the end of the 2025 seasons, largely due to significant reductions in coarse grain stocks. Conversely, global inventories of wheat and rice are projected to rise, leading to a world cereal stocks-to-use ratio of 30.1 percent for 2024/25, slightly down from the prior year, indicating still comfortable levels of supply.
The forecast for world cereal trade in 2024/25 has been lowered by 5.3 million tonnes to 478.9 million tonnes, marking a 6.7 percent contraction from the previous year and the lowest level since 2019/20, primarily driven by reduced purchases from China.
In a related development, the Agricultural Market Information System released its monthly Market Monitor, emphasizing the need for dialogue on food commodity trade to ensure global food security, highlighting that the average tariff on agricultural goods has plummeted by over 50 percent from 2005 to 2022.
