Food Prices Decline Driven by Abundant Grain and Sugar Supplies

In October, global prices for food products decreased overall, primarily due to abundant supplies of grain crops and sugar. The Food and Agriculture Organization (FAO) reported this in a bulletin published on Friday.

The FAO food price index averaged 126.4 points in October, which is 1.6% lower than the figure in September. The index for grain crops fell by 1.3%, with wheat prices dropping by 1.0%, coarse grains by 1.1%, and rice by 2.5%.

The meat price index decreased by 2.0% in October, driven by declines in pork and poultry prices, while beef prices continued to rise. The dairy price index saw a decline of 3.4%, particularly due to falling butter prices and limited demand for milk powder.

Sugar prices dropped by 5.3%, reaching the lowest level since 2020. This decline is attributed to increased production in Brazil and Asia, as well as a decrease in oil prices. The only sector that reported an increase was the vegetable oils market, where prices rose by 0.9% due to demand for biofuels and delayed harvests in the Black Sea region.

According to the FAO's new forecasts, global grain production is expected to reach 2.99 billion tons by 2025, a record figure. Stocks will increase by 5.7% to 916.3 million tons, while the ratio of consumption to stocks is projected to reach 31.1%, the highest level since 2017. At the same time, global grain trade is forecasted to grow by 3.2%, reaching 499.5 million tons.

The FAO's 'Monthly Agricultural Market Bulletin' also notes that the number of food export restrictions has decreased, notably by Argentina, India, and Russia.