World food commodity prices fall in January as sugar, vegetable oils decline

ROME – Global food commodity prices fell in January, led by sharp declines in sugar and vegetable oils, the Food and Agriculture Organisation (FAO) said on Feb 7.

The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 124.9 points in January against 127 in December 2024. Despite the monthly fall, the index remains 6.2 per cent higher than a year earlier but is 22 per cent below its March 2022 peak.

Sugar prices dropped 6.8 per cent from the previous month and 18.5 per cent on the year. This is largely attributed to improved global supply prospects, thanks in part to favourable weather in Brazil and India resuming exports.

Vegetable oil prices declined 5.6 per cent in January, as global palm and rapeseed oil prices fell while soy and sunflower oil quotations remained stable. Despite the January dip, the index is still up 24.9 per cent on the year.

Meat prices shed 1.7 per cent in January.

By contrast, cereal prices saw a slight uptick, climbing 0.3 per cent from December 2024, but remain 6.9 per cent lower than in January 2024. While wheat export prices fell slightly, maize prices increased due to revised lower production and stock forecasts in the US.

Rice prices dropped 4.7 per cent, reflecting ample supplies.

Dairy prices rose 2.4 per cent month on month and 20.4 per cent year on year, led by a monthly surge in cheese quotations, which outweighed declines in butter and milk powder prices.

In a separate report, the FAO trimmed its forecast for global cereal production in 2024, due primarily to a cut in estimates for US maize output.

The winter wheat planting season in the northern hemisphere concluded in January, with greater sowing in France, Germany and Britain, while Russia saw a reverse due to weather conditions, FAO said.

Maize harvests in the southern hemisphere will begin in the second quarter, with improved yields expected in Argentina and Brazil. High maize prices have led to more planting in South Africa.

FAO raised its forecast for world cereal utilisation in 2024/25 by 0.9 per cent to 2.869 billion tonnes, while global cereal stocks are expected to decline 2.2 per cent by the close of seasons in 2025, hit by the contraction in US maize stocks.

International trade in cereals in 2024/25 is forecast to contract by 5.6 per cent compared with the previous year to 483.5 million tonnes, largely due to lower demand from China for barley, maize and wheat. REUTERS