Global food prices fell by 2% in 2024, driven by falling cereal and sugar prices. But vegetable oils, dairy products and meats…
Good news for consumers around the world: according to the latest figures published by the Food and Agriculture Organization of the United Nations (FAO), food prices overall decreased by 2.1% in 2024 compared to to the previous year. This decline is mainly explained by the decline in world prices of cereals and sugar. Decryption.
A falling FAO index, driven by cereals and sugar
The food price index calculated each month by the FAO, which tracks the evolution of international prices for a basket of basic products, recorded a notable decrease for two major categories in 2024:
- THE cerealswhose prices fell by 13.3% compared to 2023
- The sucrewhich saw its prices fall by 13.2% over the same period
These significant decreases made it possible to offset the increase observed in other sectors, in particular:
- THE vegetable oils (+9,4%)
- THE dairy products (+4.7%), driven by the surge in butter prices
- THE meats (+2,7%)
Wheat returns to pre-war levels
After the surge in cereal prices, and in particular wheat, following Russia's invasion of Ukraine, prices continued to fall to return to their pre-war levels on international markets. . In December 2024, wheat export prices thus remained generally stable.
Downward pressure from weak international demand and increased seasonal supplies from crops in Argentina and Australia were offset by upward pressure from poor winter crop conditions in Russia.
Explains the FAO monthly report
Slight increase for corn, decrease for rice
Concerning other cereals:
- World prices of but rose slightly, supported by higher export sales and tighter supply in the United States, as well as strong demand for Ukrainian origins.
- The courses of thebarley have progressed, while those of sorgho have decreased.
- The prices of riz fell 1.2% in December, driven by a slowdown in demand for fragrant rice. Over the whole of 2024, they show a slight increase of 0.8%, driven by imports from several Asian countries.
Record exports and abundant supply push sugar prices down
The marked drop in sugar prices is mainly explained by record exports from Brazil over the past year, combined with a positive outlook for global supply for the 2024/25 campaign.
Vegetable oils: prices that remain high despite a slight drop
Despite a very slight decline in December, the annual prices of vegetable oils remained at high levels in 2024. This trend is mainly driven by palm oil, in a context of tightening supply at the global level. .
What consequences for consumers and the global economy?
The overall drop in food prices in 2024 is good news for consumers, who have had to face galloping inflation in recent years that weighs heavily on their purchasing power. However, not all products are in the same boat, as shown by the increases recorded for oils, dairy products and meats.
At the macroeconomic level, this contrasting development in the prices of agricultural raw materials could have varying repercussions depending on the country:
- Countries exporting cereals and sugar could see their revenues decline
- Conversely, countries importing these same products will benefit from more affordable prices
- Palm oil producing countries will benefit from high prices
- Breeders will have to deal with rising animal feed costs
It will therefore be necessary to carefully monitor the development of these different markets in the coming months, in order to anticipate their possible repercussions on the global economy and food security. The volatility of agricultural raw material prices remains a major challenge for players in the sector and for consumers alike.
