The United Nations Food and Agriculture Organization (FAO) said on Friday that global food commodity prices decreased in January thanks to a sharp decline in the prices of sugar and vegetable oils.
The average of the FAO index – which follows monthly the prices of the most traded food commodities in the world – was 124.9 points in January, compared to 127 points in December 2024.
Despite the monthly decrease, the index remained 6.2 % higher than its level a year ago, but it is still 22 % less than its peak in March 2022.
Causes of decline
- Sugar prices fell 6.8% on a monthly basis and 18.5% on an annual basis, and this decrease is largely due to the improvement of the global supply expectations of factors, including the appropriate weather in Brazil and India, which resumed sugar exports.
- The prices of vegetable oils decreased 5.6% last month, with the decrease in the prices of palm oil and the global turnout oil, while the prices of soy oil and sunflower oil remained stable.
- Despite the decrease in January, the index remained 24.9% on an annual basis.
- Meat prices fell 1.7% last month.
A height in the rest of the other products
In contrast to that:
- The grain prices witnessed a slight increase by 0.3% from December, but it remained 6.9% less than January 2024.
While the export prices of wheat declined slightly, the prices of the atom rose due to the low expectations for production and stock in the United States, and rice prices fell 4.7%, which reflects the abundance of supplies for export.
- Dairy products prices increased 2.4 % on a monthly basis, 20.4 % on an annual basis driven by a monthly increase in cheese prices, which dispelled decreases in butter prices and milk powder.
Grain production forecasts
In a separate report, FAO reduced its expectations for global grain production in 2024 to 2.840 billion tons, compared to 2.841 billion in the past.
This amendment is primarily due to the reduction of corn production estimates in the United States.
The organization said that the winter wheat transplant season in the northern hemisphere ended in January with an increase in agriculture in France, Germany and Britain, while Russia witnessed a decrease due to weather conditions.
FAO raised its expectations to use global pills in 2024-2025 by 0.9% to 2.869 billion tons, while international grain stocks are expected to decrease 2.2% by the end of the season in 2025 due to the contraction of US corn stocks.
It is expected that the volume of international trade in the grains will shrink in 2024-2025 by 5.6% compared to the previous year to 483.5 million tons, due to a large extent to the decrease in demand from China on barley, corn and wheat.
