- Rising prices in sugar, dairy, and vegetable oil drive global food commodity costs
ROME – Global food commodity prices experienced a notable increase in February, primarily driven by surging prices in sugar, dairy, and vegetable oils, as revealed in a recent report.
The Food Price Index, which monitors monthly fluctuations in international prices for widely traded food commodities, averaged 127.1 points in February, reflecting a 1.6 percent rise from January and an 8.2 percent increase compared to February 2024.
This upswing was primarily influenced by the Sugar Price Index, which saw a 6.6 percent rebound from January after three months of decline, reaching 118.5 points. Concerns regarding tighter global supplies for the 2024/25 season—particularly stemming from reduced production forecasts in India and adverse weather impacting Brazilian crops—contributed to this surge.
Dairy prices climbed 4.0 percent from January, averaging 148.7 points, as elevated demand for cheese and whole milk powder outpaced production in leading export regions.
Vegetable oil prices also rose, averaging 156.0 points in February—a 2.0 percent increase from the previous month and a staggering 29.1 percent rise from the same period last year. This surge was largely due to climbing costs for palm, soy, and sunflower oils, influenced by seasonal supply constraints in Southeast Asia and strong biodiesel sector demand.
Cereal prices saw a marginal increase of 0.7 percent, averaging 112.6 points. Wheat prices rose due to tighter supplies from the Russian Federation and concerns about crop conditions in Eastern Europe and North America. While maize prices continued their upward trend, supported by reduced supplies in Brazil and robust U.S. export demand, rice prices dropped by 6.8 percent owing to sufficient available supplies and diminished import interest.
Meat prices remained stable, averaging 118.0 points, slightly down by 0.1 percent from January. Prices for poultry and pig meat softened due to ample availability, while ovine and bovine meat prices remained strong amid sustained global demand.
Future forecasts indicate a slight uptick in global wheat production for 2025
The latest projections estimate global wheat production for 2025 to reach 796 million tonnes, a modest increase of nearly 1 percent from the previous year. Anticipated production gains in the European Union, particularly in France and Germany, are expected to drive this increase, although challenges such as drought in Eastern Europe and excessive rains in the West could pose risks. In the U.S., while wheat acreage is set to expand, drought conditions could lead to lower yields.
Additionally, rice output is predicted to achieve a record-high of 543 million tonnes for 2024/25, bolstered by favorable prospects in India, Cambodia, and Myanmar.
Total global cereal production is projected at 2,842 million tonnes for 2024, reflecting a slight increase from 2023 levels.
Global cereal utilization for the upcoming marketing year is forecasted to hit 2,867 million tonnes, marking a 1.0 percent rise, largely driven by record expected rice consumption. Wheat usage is anticipated to stabilize, with food demand slightly dropping but industrial use rising, particularly in China.
FAO anticipates a 1.9 percent decline in global cereal stocks, predicting 2025 ending stocks at 869.3 million tonnes, with increased stocks in the Russian Federation and Ukraine countered by reductions in other regions. The global stocks-to-use ratio is expected to dip to 29.9 percent, still indicating a satisfactory supply. The forecast for global cereal trade has been adjusted to 484.2 million tonnes, reflecting a 5.6 percent decrease due to shifting export dynamics.
Diverse crop outlooks across regions for 2025
In Asia, the outlook displays disparities; Far East Asia is expected to maintain wheat production growth due to favorable weather, whereas Near East Asia faces challenges from low rainfall affecting yield potentials, likely resulting in below-average wheat harvests.
Latin America and the Caribbean‘s maize production in South America is under threat from mixed weather conditions and the possibility of pest outbreaks in Argentina, notwithstanding expectations of above-average total production due to strong prospects in Brazil. In Central America and the Caribbean, ongoing dry conditions are limiting cereal planting in Mexico, while beneficial weather in different areas is likely to enhance yields.
The report also identifies 45 countries, including 33 in Africa, facing critical food assistance needs. Continuing conflicts and civil unrest remain prominent drivers of acute food insecurity, particularly affecting regions like the Gaza Strip and Sudan.
The Agricultural Market Information System (AMIS) has concurrently published its monthly Market Monitor report, offering detailed market analysis alongside initial global wheat production forecasts for 2025.
