Global food prices fall for fifth month as dairy and sugar lead declines

Global food commodity prices extended their downward trend in January, according to the latest data from the United Nations Food and Agriculture Organization (FAO). The agency's monthly food price index, a key gauge for international market prices, fell by 0.4% last month to 123.9 points, marking its fifth consecutive monthly decline.

Mixed Movements Across Key Categories

The decline was driven by significant drops in the dairy and sugar indices. The dairy price index fell 5% monthly, primarily due to ample cheese and butter supplies in major exporting regions. Similarly, the sugar price index decreased by 1%, supported by recovering production in India and optimistic harvest prospects in Thailand. The meat price index also edged down 0.4%, influenced by subdued global demand and increased pork availability.

Vegetable Oils and Cereals Buck the Trend

In contrast, the vegetable oil price index rose 2.1% in January. This increase was attributed to seasonal production slowdowns in Southeast Asia and firm demand from the biofuel sector. Meanwhile, the cereal price index saw a marginal increase of just 0.2%. This relative stability occurred despite a 1.8% rise in rice prices, as abundant supplies of wheat and maize from key producers helped balance the market.

Improved Production Outlook for 2025

In a separate report, the FAO provided an optimistic forecast for global cereal production in 2025. The forecast was revised upward to 3.023 billion tons, buoyed by expected higher wheat yields in Argentina, Canada, and the European Union, alongside expanded corn planting areas in China and the United States. Consequently, the global stock-to-use ratio for cereals is projected to reach 31.8%, which would be its highest level since 2001, indicating comfortable supply buffers.