Most Commodity Prices Decline, But Concerns Over Trade, Climate Remain

The FAO Food Price Index declined by 1.6 percent from December. While the Index was 6.2 percent higher than its January 2024 level, it remains 22 percent below its peak of March 2022.

The Cereal Price Index rose marginally in January but remained nearly 7 percent below its January 2024 level. Wheat prices declined slightly due to slowing exports, but concerns over supplies and crop conditions in several major producing areas kept the reduction small. Maize prices rose due to poor harvest conditions, seasonally tight supplies, and reduced forecasts in several major producing areas. Rice prices declined due to strong supplies and exports.

The Vegetable Oil Price Index fell by 5.6 percent in January but remained nearly 25 percent above its January 2024 level. Palm and rapeseed oil prices both declined due to slowing demand. Soy oil prices stayed steady from December due to concerns over weather in South America.

The Meat and Sugar Price Indices both declined, by 1.4 and 6.8 percent, respectively, while the Dairy Price Index rose by 2.4 percent.

The latest AMIS Market Monitor also cites falling prices for most commodities; however, the report emphasizes the need to monitor market reactions to potential U.S. trade policy shifts. In addition, predictions that global temperatures will continue to rise in 2025 could have significant implications for agricultural yields, and thus commodity prices, around the world.  Addressing both trade and climate challenges, as well as reducing food waste and ensuring food access for the most vulnerable populations, will be critical to global food security.

Global wheat production and utilization are both expected to be near their previous year’s levels. Global wheat trade for 2024-2025 is forecast to fall due to reductions in Chinese imports and exports from the EU and Russia. Global wheat ending stocks were forecast down slightly in January and are expected to be 2.9 percent below opening levels.

Global maize production forecasts remained steady in January, with production expected to be 2 percent lower than 2023. Maize utilization is forecast to increase due to stronger feed use, while trade is expected to fall by nearly 7 percent from 2023-2024 due to falling demand from China and reduced exports from several producing regions. Global maize ending stock forecasts fell in January, with stocks expected to be 4.3 below opening levels.

Global rice production forecasts increased slightly in January, as did utilization expectations. Trade forecasts rose due to improved export expectations for several Asian countries. Global rice ending stocks are expected to reach a new record high in 2024.

Global soybean production forecasts declined in January due to lower expected production in Argentina and the U.S. Soybean utilization and trade forecasts both remained stable. Global soybean ending stock forecasts declined in January, but stocks are still expected to reach a record high in 2024.

Sara Gustafson is a freelance communications consultant.