The world cereal price index fell 2.7 percent, down eight percent from a year earlier. FAO: Food prices rose in November Economic developments
The world food price index rose in November to its highest level since April 2023, up 0.5 percent from October. This was mainly due to a sharp rise in international vegetable oil quotations, according to the Food and Agriculture Organization of the United Nations (FAO).
The FAO index, which tracks monthly changes in international prices of a range of key food commodities, settled at 127.5 points in November, up 5.7 percent from a year earlier but still 20.4 percent below its peak in March 2022.
Vegetable oil prices soar
The vegetable oil price index rose 7.5 percent in November from October, the second significant increase in two months and 32 percent above its level a year ago.
World palm oil prices rose amid concerns over lower-than-expected production due to heavy rains in Southeast Asia.
Soybean oil quotations increased amid global import demand, while rapeseed and sunflower oil prices rose as a result of tighter global supply.
Dairy products
The Dairy Price Index maintained its upward trend in November, rising 0.6 percent from October, supported by a rebound in global demand for whole milk powder.
Butter prices hit a new record high amid strong demand and tight supplies in Western Europe, while cheese prices rose on tight export options.
Other Indices Decline
The Cereal Price Index fell 2.7 percent, down eight percent from a year earlier. World wheat prices fell on weaker international import demand and increased supplies as harvests continue in the Southern Hemisphere.
World corn prices remained stable, as strong domestic demand in Brazil and increased Mexican demand for supplies from the United States were offset by favorable weather in South America, lower demand for Ukrainian supplies and seasonal pressure from the ongoing U.S. harvest.
The rice price index fell four percent in November, reflecting increased market competition and currency fluctuations.
The average sugar price fell 2.4 percent from October, helped by the start of the season in India and Thailand and easing concerns about the prospects for next year’s sugarcane crop in Brazil, where recent rains have increased soil moisture.
The Meat Price Index fell 0.8 percent in November, driven mainly by lower pigmeat quotations in the European Union, reflecting stable supplies and continued weak global and domestic demand. World egg and poultry prices fell slightly, while international bovine meat quotations remained stable.
FAO Forecast
World cereal production in 2024 is set to decline by about 0.6 percent from the previous year to 2 841 million tonnes, according to the FAO Cereal Supply and Demand Survey, released on Friday. Nevertheless, this is the second-highest output ever.
World wheat production in 2024 is expected to be unchanged from 2023 at 789 million tonnes, while maize output is set to decline by 1.9 percent from the previous year to 1 271 million tonnes due to lower-than-expected harvests in the European Union and the United States. FAO’s forecast for world rice production in 2024/25 is revised slightly downwards, to a record 538.8 million tonnes, up 0.8 percent.
Lower wheat prices in 2025 could hamper expansion of winter wheat plantings in the Northern Hemisphere. Below-normal precipitation in key wheat-growing regions of the Russian Federation has resulted in low soil moisture levels, which has had a negative impact on sowing. In contrast, favorable soil moisture and government support policies, as well as favorable prices, should stimulate expansion of sowing areas in China and India.