Global food prices steady in March as vegetable oil rises

Onome Amuge

The FAO Food Price Index (FFPI), a key gauge of global food commodity prices, showed little movement in March compared to its revised February level. The Food and Agriculture Organization of the United Nations (FAO) reported that a significant increase in vegetable oil prices was offset by decreases in world cereal and sugar quotations, resulting in overall stability for the benchmark index.

The FFPI averaged 127.1 points in March 2025 , representing a 6.9 percent increase compared to the corresponding period last year (March 2024: 119.0 points). However, it remained 20.7 percent below its peak of 160.2 points reached in March 2022, shortly after the start of the war in Ukraine.

The FAO Cereal Price Index registered 109.7 points in March, a 2.6 percent month-on-month decrease and 1.1 percent lower than in March 2024. The FAO attributed the decline in global wheat prices to easing concerns about crop conditions in key Northern Hemisphere exporting nations, although rising trade tensions created some market uncertainty. This downward pressure was partially offset by currency fluctuations, tighter supply in the Russian Federation, and Turkey’s decision to eliminate its wheat import quota.

World maize prices also saw a decline in March, reversing a series of previous monthly increases. The FAO pointed to improved crop conditions in Brazil following recent rainfall, the commencement of the harvest in Argentina, and downbeat forecasts for the upcoming season in the U.S as key drivers. Weaker-than-expected import demand from China and anxieties surrounding potential trade policy shifts in several nations further contributed to the downward pressure on maize prices.

Among other coarse grains, global sorghum prices edged down, while barley prices saw a marginal increase. The FAO All Rice Price Index also experienced a 1.7 percent decline in March, reflecting subdued import demand and abundant exportable supplies, which placed downward pressure on export quotations.

The FAO Vegetable Oil Price Index averaged 161.8 points in March, marking a 3.7 percent month-on-month increase. This puts the index 23.9 percent higher than its level in March 2024. The continued upward trend was fueled by rising prices across palm, soy, rapeseed, and sunflower oils. International palm oil prices, in particular, climbed for the second consecutive month, largely due to ongoing tight supply in key Southeast Asian producing nations, where output is currently at its seasonal low.

World soyoil prices also saw an increase, buoyed by strong global import demand driven by its competitive pricing compared to other vegetable oils. This occurred despite softer demand from the biofuel sector, notably in the U.S. Similarly, international rapeseed and sunflower oil prices rose from February, reflecting tightening supplies from major exporting countries at a time of firm global import demand.

The FAO Meat Price Index averaged 118.0 points in March, a 0.9 percent increase from February and 2.7 percent higher than a year ago. The primary driver of this rise was higher pig meat prices, largely due to increased quotations in the European Union following Germany’s reinstatement of its foot-and-mouth disease-free status. This prompted key trading partners, such as the United Kingdom, to lift import bans. Increased demand also helped to stabilise the market, while the strengthening of the euro against the US dollar further supported the upward trend.

Ovine meat prices also saw an uptick, supported by strong global demand in anticipation of the Easter holidays. Similarly, world bovine meat quotations rose, reflecting tight global supplies coupled with robust international demand. In contrast, poultry meat prices remained largely stable, as global supply and demand remained in equilibrium despite the ongoing challenges posed by widespread avian influenza outbreaks in several major producing nations.

The FAO Dairy Price Index held steady at 148.7 points in March, unchanged from February 2025 but still a significant 19.9 percent higher than its value in March 2024. This stability resulted from a decline in international cheese prices being offset by increases in butter and milk powder quotations.

International butter prices continued their upward trend for the third consecutive month, rising by 3.9 percent compared to February. This increase was fueled by strong retail sales and growing international demand, occurring alongside seasonally declining supplies in Oceania and sluggish production in Europe. Skim milk powder prices also increased for the second consecutive month, supported by a combination of robust international demand and tightening supply.

International whole milk powder quotations also saw a slight increase. Mixed export demand in Europe, partly influenced by the presence of foot-and-mouth disease in some European nations, was largely balanced by softer global purchasing activity from Oceania, where milk production is seasonally declining. In contrast, international cheese prices decreased by 1.8 percent, ending a nine-month streak of increases. This decline was driven by stable supply in Europe coinciding with weakening international and domestic demand in Oceania.

The FAO Sugar Price Index averaged 116.9 points in March, a 1.4 percent decrease from February and 12.3 percent lower than its level a year ago. This decline was primarily attributed to indications of softening global demand, which has eased previous concerns regarding tight global sugar supplies.

Adding to the downward pressure on world sugar prices was recent rainfall in key sugarcane-growing regions of southern Brazil, following a period of prolonged dryness. However, the decline in March was limited by worsening production forecasts in India and ongoing concerns regarding the overall outlook for Brazil’s sugarcane crop, which continued to exert upward pressure on prices.