Food Prices Reach Highest Level Since April 2023

Rising dairy and vegetable oil prices drove the FAO Food Price Index up by 5.7 percent from November 2023 and to the highest value seen since April 2023. The Index remained more than 20 percent below the peak reached in March 2022, however.

The Cereal Price Index declined by 2.7 percent from October and by 8 percent from November 2023. Ongoing harvests and improved production conditions in major producing regions lowered wheat prices. Maize prices remained stable as ongoing harvests, favorable weather, and weakening demand in some regions balanced rising demand by Brazil and Mexico. Rice prices fell due to increased market competition, ongoing harvests, and the strengthening US dollar.

The Vegetable Oil Price Index reached the highest level seen since July 2022, up 7.5 percent from October. Palm oil prices increased due to weather concerns in Southeast Asia and low global production. Soy oil prices rose due to strong import demand.

The Dairy Price Index rose by 0.6 percent from October and over 20 percent from November 2023 levels. The Meat and Sugar Price Indices fell by 0.8 percent and 2.4 percent from October, respectively. Meat prices remained almost 6 percent higher than November 2023 levels, however, while sugar prices over 20 percent lower than previous year levels.

The latest AMIS Market Monitor echoed the FAO Food Price Index’s findings, citing commodity prices lower than those seen in November 2023. It also cautions about continuing uncertainties stemming from potential shifts in US trade policies in 2025, as well as the likely continued impacts of 2024’s hotter weather and variable rainfall on 2025 crop yields. The November Monitor editorial emphasizes the need for policymakers to avoid distortionary policies such as export restrictions in order to prevent increased food market volatility.

Wheat production for 2024 is expected to be consistent with 2023 levels; utilization levels are also forecast to remain stable as increased food use balances declining feed use. Wheat trade is expected to fall by 5.4 percent from the peak reached in 2023-2024. Global wheat ending stocks are expected to be more than 2 percent below their opening levels.

Maize production forecasts for 2024 declined in November, with expected production nearly 2 percent below 2023 levels due to lower yields in the European Union and the US. Maize utilization is expected to be slightly higher than the previous year’s level, while trade is expected to fall by over 6 percent based on weak demand from China and reduced exports from Brazil, the EU, and the US. Global maize ending stocks are expected to be 1.4 percent below their opening levels.

Rice production is expected to reach a record high in 2024, while utilization is expected to increase based on rising use in several Asian countries. Rice trade is also forecast up. Global rice ending stocks for 2024-2025 are expected to reach a record high as well.

Soybean production forecasts for 2024 fell slightly in November, as did utilization expectations following lower production forecasts from several producers. Soybean trade is expected to be slightly lower than the record reached in 2023-2024. Global soybean ending stocks are expected to reach record highs despite falling stocks in the US.

AMIS reports that fertilizer markets remained stable in November, with slowing purchases expected to continue through the rest of 2024. Natural gas prices saw seasonal increases in Europe and the US, but high inventories and strong imports kept price increases in check. Ammonia prices also remained stable in November due to strong supplies.

Urea prices fell slightly in November, while phosphorus fertilizer prices stabilized after increasing over the past few months. Potash prices continued to fall in November.

Sara Gustafson is a freelance communications consultant.