The FAO Food Price Index experienced an increase in February, reflecting rises in sugar, dairy, and vegetable oil prices, as outlined in the latest report from the Food and Agriculture Organization of the United Nations. The index averaged 127.1 points for February, representing a 1.6 percent rise from January and an 8.2 percent increase compared to February 2024. The primary driver of this surge was the FAO Sugar Price Index, which rose by 6.6 percent after three months of decline, reaching 118.5 points. The increase was attributed to concerns about tighter global supplies for the 2024/25 season, largely due to declining production prospects in India and unfavorable weather conditions in Brazil.
Similarly, the FAO Dairy Price Index saw a 4.0 percent increase, averaging 148.7 points, driven by higher prices across major dairy products, as strong demand outstripped production in key exporting regions. The FAO Vegetable Oil Price Index also rose, averaging 156.0 points, a 2.0 percent increase from January. This rise was significantly influenced by higher prices for palm, soy, and sunflower oils, prompted by seasonal supply constraints and strong demand from the biodiesel sector. The FAO Cereal Price Index saw a modest increase of 0.7 percent, while wheat prices rose due to tighter supplies and concerns about crop conditions in various regions.
Looking ahead, the FAO has forecasted a modest increase in global wheat production for 2025, estimating it at 796 million tonnes. While production prospects appear promising in the EU, challenges such as adverse weather could impact yields. Rice production is set to reach a record high, driven by favorable conditions in major producing countries. However, the FAO also notes that many regions are experiencing varying weather impacts, affecting crop yields and necessitating external food assistance for several countries facing severe hunger.