Surging international vegetable oil quotations push up world food prices
Higher vegetable quotations drove up the FAO Food Price Index in November, marking its highest value since April 2023.
The Food and Agriculture Organization of the United Nations (FAO) reports that the Index averaged 127.5 points in November, up 0.5% from October. This represents a 5.7% increase from a year ago while still 20.4% below its March 2022 peak, when it reached 160.2 points.
The FAO Vegetable Oil Price Index averaged 164.1 points in November, up 7.5% month over month, reaching its highest level since July 2022.
Extreme rainfall in Southeast Asia raised concerns about lower-than-expected output.
Consequently, international palm oil prices increased. Global soy oil prices rose on global import demand, while rapeseed and sunflower oil quotations increased as tightening global supply prospects affected their respective markets, according to the FAO.
Dairy increases while cereal prices drop
The FAO Dairy Price Index increased by 0.6% from October. This was driven by rebounding global import demand for whole milk powder. There was also strong demand for butter, with prices reaching a new record level. Cheese prices also rose due to limited export availability.
The FAO Cereal Price Index declined by 2.7%, representing an 8% drop from a year earlier. Global wheat prices fell due to weaker international import demand, increased supplies from the ongoing harvests in the Southern Hemisphere, and improved crop conditions for the 2025 harvests in some major Northern Hemisphere exporting countries.
World maize prices were stable as strong domestic demand in Brazil and Mexico’s demand for supplies from the US was offset by favorable weather in South America and reduced demand for Ukrainian supplies. World prices of barley and sorghum declined slightly in November.
The FAO All-Rice Price Index declined by 4%, driven by increased market competition, harvest pressures and currency fluctuations.
The FAO Sugar Price Index decreased by 2.4% from October 2024, impacted by the start of the crushing season in India and Thailand.
The FAO Meat Price Index dropped 0.8% in November because of lower European pig meat quotations.
Global ovine and poultry meat prices fell slightly, while international bovine meat quotations remained stable.
Global cereal decline
The FAO also reports that global cereal production in 2024 is forecast to decline by around 0.6% from last year to 2 841 million tons. This is a downward revision from October but is still the second-largest output on record.
Global wheat output for 2024 is expected to be 789 million tons, while maize output is forecast to decline by 1.9% to 1 271 million tons, amid lower yields in the EU and US.
The FAO also forecasts international trade in cereals in 2024/25 to be 484 million tons, a 4.6% decrease from the previous year. Global wheat and maize trade volumes are expected to decline, while rice trade is predicted to increase.
