Rising Global Food Prices: What You Need to Know About Supply Concerns and Their Impact

In February, sugar prices jumped by 6.6% compared to January. This spike comes from worries about tighter global supplies for the upcoming 2024/25 season, influenced by difficult weather in Brazil.

Dairy prices also rose by 4% in January. All major dairy products saw an increase, driven by strong import demand that outpaced production in key export areas.

Vegetable oils climbed by 2% month-on-month and a staggering 29.1% year-on-year. The rise in prices for palm, soy, and sunflower oils is mainly due to supply issues in Southeast Asia and high demand from the biodiesel industry.

The FAO’s cereal price index grew slightly, increasing by 0.7% since January. Wheat prices went up because of tighter supplies from Russia and concerns about crops in Eastern Europe and North America. Meanwhile, maize prices rose because of reduced availability in Brazil and strong demand from U.S. exports. In contrast, global rice prices dipped by 6.8% in February.

On the meat front, prices saw a minor decrease of 0.1% for the month.

Looking ahead, the FAO forecasts a slight increase in global wheat production for 2025. They predict it will reach about 796 million tonnes, a 1% rise from last year. This growth is mainly due to expected increases in the European Union, particularly in France and Germany. However, dry conditions in Eastern Europe and heavy rainfall in Western Europe could pose challenges for yields. In the U.S., more land might be planted with wheat, but drought could lead to lower yields.

For rice, production is projected to hit a record 543 million tonnes in 2024/25, thanks to favorable conditions in India, Cambodia, and Myanmar.

Finally, the FAO has revised its estimate for global cereal production in 2024 to 2.842 billion tonnes, indicating a small increase compared to 2023.

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