World food prices hit 19-month high on vegetable oil increases
Onome Amuge
The United Nations FAO Food Price Index (FFPI) maintained an upward trajectory in November 2024, reaching a 19-month high with a 0.5 percent increase over October’s levels.
The surge is attributed to higher prices for dairy products and vegetable oils, which more than made up for drops in meat, cereals, and sugar quotations.
November 2024 saw a year-over-year increase of 5.7 percent in the FAO Food Price Index, a key indicator of global food commodity prices. The index reached 127.5 points, its highest level since April 2023, but remained 20.4 percent below the March 2022 peak of 160.2 points.
The period in review also saw a notable three percent drop in the FAO Cereal Price Index, landing at 111.4 points, reflecting an eight percent decrease from the same month in 2023.
The price index’s decrease was mainly driven by global wheat prices, which fell due to increased supplies from ongoing Southern Hemisphere harvests and improved crop conditions for 2025 harvests in major Northern Hemisphere exporting countries. Weaker international demand added to the downward pressure on cereal prices, resulting in softer prices overall.
Meanwhile, global maize prices remained largely unchanged, as opposing factors kept the price level in balance. Downward pressure on prices stemmed from generally favourable weather conditions in South America during the ongoing sowing season, reduced demand for Ukrainian maize due to global uncertainties, and the seasonal pressure from the US harvest. At the same time, strong domestic demand for maize in Brazil and Mexico’s appetite for US maize exports provided upward pressure, keeping prices relatively stable.
In November 2024, world prices of other coarse grains, namely barley and sorghum, experienced a slight drop, reflecting a trend towards cheaper prices.
On the other hand, the FAO All Rice Price Index dropped by four percent, primarily driven by various factors across different market segments. The decline was mainly due to increased market competition among rice producers, pressure from fresh harvests, and currency depreciation against the US dollar.
The FAO Vegetable Oil Price Index soared to an 18-month high of 164.1 points in November 2024, recording a 7.5 percent rise from the previous month. The index also saw significant increases in the prices of palm, rapeseed, soy, and sunflower oils, with palm oil prices rising for the sixth month in a row due to ongoing concerns about lower production levels caused by excessive rainfall in Southeast Asia.
Amid the overall increase in vegetable oil prices, soyoil prices also continued to rise in November 2024. The main reason for this was the strong global demand for soyoil imports. Similarly, prices for rapeseed and sunflower oils also increased due to market concerns about tightening supplies of these oils worldwide.
The price of butter hit a record high for the fourteenth consecutive month in November 2024, reflecting a growing global appetite for this rich dairy product. Tight inventories in Western Europe and high domestic and international demand for butter drove prices upward. Similarly, cheese prices also climbed due to limited supplies in the face of increasing import demand for immediate delivery.
Despite a 0.8 percent decline from October’s revised level, the FAO Meat Price Index registered a year-on-year increase of 5.9 percent in November 2024. The index stood at 118.1 points for the month, primarily due to a drop in international pig meat prices. This downward trend, which had been ongoing for five consecutive months, was attributed to abundant supplies, notably in the European Union, and weak global and domestic demand.
The FAO Sugar Price Index, which tracks the prices of the sweet commodity, dipped by 2.4 percent in November 2024, marking a shift from the two consecutive monthly increases it had seen before. The index hit 126.4 points, which was 21.7 percent lower than the same month last year.
The downturn in global sugar prices in November 2024 was largely a result of the commencement of India and Thailand’s crushing season, which brings new sugar cane harvests into the market, combined with improved crop prospects in Brazil after a period of prolonged dry weather. While initial harvest delays due to increased rainfall in key growing regions of Brazil disrupted the harvest process, the moisture helped ensure a better crop in the upcoming season.
Furthermore, the November sugar price slump was also shaped by macroeconomic factors. The Brazilian real weakened against the United States dollar, lowering the cost of Brazilian exports and making Brazilian sugar more competitive in international markets.