Commodity Prices Stable in March, But Concerns over Trade Remain

The FAO Food Price Index remained stable in March, with falling cereal and sugar prices balancing rising meat and vegetable oil prices. The Index was almost 7 percent higher than its March 2024 level but still remains significantly below March 2022 levels.

The Cereal Price Index fell by 2.6 percent in March, with improving crop conditions in several major exporting countries and uncertainty about trade driving down wheat prices. Maize prices also fell based on improving conditions and trade uncertainties. Rice prices declined due to falling import demand and strong export supplies.

The Vegetable Oil Price Index rose by 3.7 percent and was nearly 24 percent higher than March 2024 levels. Seasonally low supplies in several major exporting countries drove up palm oil prices for the second month in a row, while soybean oil prices rose due to rising import demand.

The Meat Price Index rose by around 1 percent, while the Dairy Price Index remained unchanged from February and the Sugar Price Index fell by 1.4 percent.

The latest AMIS Market Monitor also highlights the potential for current trade uncertainties to impact market functioning, prices, and food security. The report calls for continued transparency and information-sharing during this time of volatility.

Wheat production for 2024 is forecast to be marginally above 2023 levels, while wheat utilization forecasts fell and are now expected to be below 2023 levels. Expectations for total wheat trade for 2024-2025 also declined due to lower expected purchases from China and sales from Russia and Kazakhstan. Global wheat ending stocks are expected to be above opening levels.

Maize production forecasts remained stable in March, while utilization forecasts increased based on higher expected feed use in several countries. Trade is forecast to decline due to smaller purchases from China and sales from Brazil. Global maize ending stocks for 2025 are expected to be 6 percent below their opening levels.

Rice production forecasts rose slightly in March. Utilization is expected to grow rapidly due to demand for both food and non-food uses, and trade is also forecast to expand due to increased imports from several regions. Global rice ending stock forecasts remained stable in March.

Soybean production expectations rose in March, with production now expected to reach a record high in 2024-2025. Utilization forecasts also rose based on higher expected supplies in India. Global trade forecasts for 2024-2025 increased slightly, while global ending stocks remained generally stable.

Global fertilizer markets are also reacting to ongoing trade uncertainties, according to the report. Input prices generally declined in March, including for ammonia. Natural gas prices rose in the United States but fell in other parts of the northern hemisphere. Nitrogen fertilizer prices also generally fell in March. Potash prices remained stable in March, while phosphate fertilizer prices increased slightly due to strong demand and tightening supplies.