Food Prices Declined in January

Food prices declined in January, significantly more than at the end of 2024, with noticeably cheaper vegetable oils and sugar, reported the UN food agency FAO on Friday.

The FAO’s index of prices for a basket of staple food products averaged 124.9 points in January, down 1.6 percent from December, calculated the FAO. At the end of last year, prices had fallen by 0.5 percent on a monthly basis.

A comparison with the beginning of 2024 shows that food prices have increased by just over six percent at the start of the new year.

Sugar saw the largest price drop in January, falling by 6.8 percent compared to December, reflecting favorable weather conditions for sugarcane cultivation in Brazil and the lifting of export restrictions in India. Over the past year, sugar prices have decreased by as much as 22 percent.

Prices of vegetable oils also significantly fell in January, by 5.6 percent compared to December, reflecting the decrease in palm and rapeseed oil prices. Prices for sunflower and soybean oil remained at the levels of the end of last year. Compared to the beginning of last year, vegetable oils are still significantly more expensive, by approximately 25 percent.

Meat prices also decreased by 1.7 percent compared to December, as lower prices for lamb, pork, and poultry outweighed the increase in beef prices.

Grain prices remained at the levels of the end of last year, with slightly cheaper wheat and more expensive corn, partly due to reduced production and stock forecasts in the U.S. An abundant supply has lowered rice prices by 4.7 percent compared to December.

At the beginning of the new year, only milk and dairy products became more expensive, by 2.4 percent compared to December, with cheese prices jumping by 7.6 percent.

Better Wheat Harvest

In a separate report on supply and demand in the grain market, the FAO slightly lowered its production estimate for 2024, now showing a 0.6 percent decline compared to 2023, to just under 2.841 billion tons, primarily due to significantly reduced corn yield forecasts in the U.S.

Production estimates in the EU and China have been slightly raised, the FAO notes.

In the northern hemisphere, the sowing of winter crops has been completed, and the first indicators signal a better yield in Argentina and Brazil and a larger area planted with corn in South Africa due to record-high prices, the FAO has determined. At the EU level, initial data indicate a larger sown area, primarily of soft wheat in France and Germany.

Weather conditions in recent months have generally been favorable, so the wheat harvest is expected to be better in 2025, supporting forecasts of a production recovery. According to new FAO estimates, grain consumption in the 2024/2025 season is expected to increase by 0.9 percent, to 2.869 billion tons, primarily due to anticipated increased corn consumption in animal feed production.

Grain stocks are expected to be 2.2 percent lower at the end of the current season in July than at the beginning, sliding to 866.6 million tons, but should still ensure a solid supply.

Grain trade is expected to decrease by 5.6 percent in the current season, to 483.5 million tons, with a reduced export estimate for wheat from the EU and Russia.