The decline was largely driven by sharp drops in international prices of maize, palm oil, and sugar, which offset price increases in certain dairy and meat segments.
Cereal Prices Drop on Strong Global Harvests
The FAO Cereal Price Index fell by 1.8%, primarily due to ample maize supply from strong harvests in Argentina and Brazil, and an optimistic outlook in the United States. Wheat prices also declined slightly, supported by improved crop conditions in the Northern Hemisphere. In contrast, rice prices rose 1.4%, buoyed by high demand for fragrant rice, rising Indica rice prices, and currency fluctuations.
Vegetable Oils See Sharp Correction
The Vegetable Oil Price Index saw a significant 3.7?ll, with palm oil dropping the most due to seasonal production peaks in Southeast Asia. Soy oil prices declined amid higher availability from South America and weaker biofuel demand. Rapeseed and sunflower oils also slid due to better global supply outlooks and reduced consumption.
Sugar Prices Ease; Meat and Dairy Diverge
Sugar prices were down 2.6%, attributed to macroeconomic uncertainties, anticipated production recoveries, and weaker industrial demand from the food and beverage sectors.
Meanwhile, the Meat Price Index rose 1.3%, with bovine, ovine, and pig meat prices climbing, especially beef, which reached a record high. However, poultry prices fell, largely due to avian flu outbreaks in Brazil, leading to import bans and domestic oversupply.
The Dairy Price Index edged up 0.8%, bolstered by strong Asian demand. Butter prices remained at historic highs, pushing up related products like cheese and milk powders.
Record Cereal Production Expected in 2025
In its accompanying Cereal Supply and Demand Brief, the FAO forecasted global cereal production to reach a record 2,911 million tonnes in 2025 — up 2.1% from 2024. Cereal utilization is also projected to rise to 2,898 million tonnes, while global cereal stocks may increase by 1% to 873.6 million tonnes, indicating recovery from the previous year’s decline.
The global cereal trade is forecast to grow 1.9%, driven mainly by a 3.8% rise in wheat trade, even though rice exports are expected to dip slightly.
