Global Food Prices Rise in November, Driven by Dairy and Vegetable Oils
Source: DairyNews.today
The FAO Food Price Index (FFPI) climbed to 127.5 points in November 2024, marking a 0.5% increase from October and the highest level since April 2023.
Gains in dairy and vegetable oil prices outweighed declines in cereals, meat, and sugar. On an annual basis, the index was up 5.7% but remained 20.4% below its all-time peak of 160.2 points in March 2022.
Cereal Prices Decline Amid Harvest Pressure
The FAO Cereal Price Index averaged 111.4 points in November, down 2.7% month-on-month and 8.0% year-over-year. Wheat prices dropped as Southern Hemisphere harvests boosted supply and improved crop conditions in the Northern Hemisphere signaled better yields for 2025. Weak international demand further pressured prices.
Maize prices held steady, balancing favorable weather in South America, weaker demand for Ukrainian supplies, and seasonal U.S. harvest pressures against robust domestic demand in Brazil and Mexican imports of U.S. maize. Barley and sorghum prices edged lower, while the FAO All Rice Price Index fell 4.0% due to heightened competition, harvest activity, and currency depreciation against the U.S. dollar.
Vegetable Oils Hit 16-Month High
The FAO Vegetable Oil Price Index surged 7.5% to 164.1 points in November, its highest since July 2022. International palm oil prices rose for the sixth straight month, driven by concerns over lower global output amid heavy rains in Southeast Asia. Strong global demand boosted soyoil prices, while rapeseed and sunflower oil prices climbed on tightening supply outlooks.
Dairy Prices Continue to Strengthen
The FAO Dairy Price Index reached 139.9 points in November, up 0.6% from October and 20.1% year-over-year. Whole milk powder prices led the increase, reflecting higher global demand and seasonally lower milk production in Western Europe. Meanwhile, butter prices set a new record for the 14th consecutive month, driven by tight inventories and robust demand. Cheese prices also rose, fueled by limited supply amid growing spot-market demand.
Meat Prices Ease Slightly
The FAO Meat Price Index averaged 118.1 points, down 0.8% from October but up 5.9% year-over-year. International pig meat prices fell for the fifth consecutive month due to ample EU supplies and muted demand. Ovine and poultry meat prices dipped slightly, reflecting currency fluctuations and sufficient global export supplies, respectively. Bovine meat prices held steady, as rising Brazilian prices offset declines in Australia.
Sugar Prices Retreat After Prior Gains
The FAO Sugar Price Index fell 2.4% in November to 126.4 points, following two months of increases. The start of the crushing season in India and Thailand, along with improved crop prospects in Brazil, weighed on prices. While rain in Brazil’s southern regions slowed harvest progress, it bolstered soil conditions for the next crop. A weaker Brazilian real and lower crude oil prices also contributed to the decline.
Outlook
Global food prices show mixed trends, with rising costs in vegetable oils and dairy contrasting with declines in cereals, meat, and sugar. While supply chain adjustments and seasonal factors are tempering certain price pressures, persistent demand and weather uncertainties may keep volatility elevated in the months ahead.
Cereal Prices Decline Amid Harvest Pressure
The FAO Cereal Price Index averaged 111.4 points in November, down 2.7% month-on-month and 8.0% year-over-year. Wheat prices dropped as Southern Hemisphere harvests boosted supply and improved crop conditions in the Northern Hemisphere signaled better yields for 2025. Weak international demand further pressured prices.
Maize prices held steady, balancing favorable weather in South America, weaker demand for Ukrainian supplies, and seasonal U.S. harvest pressures against robust domestic demand in Brazil and Mexican imports of U.S. maize. Barley and sorghum prices edged lower, while the FAO All Rice Price Index fell 4.0% due to heightened competition, harvest activity, and currency depreciation against the U.S. dollar.
Vegetable Oils Hit 16-Month High
The FAO Vegetable Oil Price Index surged 7.5% to 164.1 points in November, its highest since July 2022. International palm oil prices rose for the sixth straight month, driven by concerns over lower global output amid heavy rains in Southeast Asia. Strong global demand boosted soyoil prices, while rapeseed and sunflower oil prices climbed on tightening supply outlooks.
Dairy Prices Continue to Strengthen
The FAO Dairy Price Index reached 139.9 points in November, up 0.6% from October and 20.1% year-over-year. Whole milk powder prices led the increase, reflecting higher global demand and seasonally lower milk production in Western Europe. Meanwhile, butter prices set a new record for the 14th consecutive month, driven by tight inventories and robust demand. Cheese prices also rose, fueled by limited supply amid growing spot-market demand.
Meat Prices Ease Slightly
The FAO Meat Price Index averaged 118.1 points, down 0.8% from October but up 5.9% year-over-year. International pig meat prices fell for the fifth consecutive month due to ample EU supplies and muted demand. Ovine and poultry meat prices dipped slightly, reflecting currency fluctuations and sufficient global export supplies, respectively. Bovine meat prices held steady, as rising Brazilian prices offset declines in Australia.
Sugar Prices Retreat After Prior Gains
The FAO Sugar Price Index fell 2.4% in November to 126.4 points, following two months of increases. The start of the crushing season in India and Thailand, along with improved crop prospects in Brazil, weighed on prices. While rain in Brazil’s southern regions slowed harvest progress, it bolstered soil conditions for the next crop. A weaker Brazilian real and lower crude oil prices also contributed to the decline.
Outlook
Global food prices show mixed trends, with rising costs in vegetable oils and dairy contrasting with declines in cereals, meat, and sugar. While supply chain adjustments and seasonal factors are tempering certain price pressures, persistent demand and weather uncertainties may keep volatility elevated in the months ahead.
