Global food prices continued their downward trend in January, marking the fifth consecutive month of declines, the Food and Agriculture Organization of the United Nations (FAO) reported Friday.
The FAO’s food price index, which tracks international prices of major food commodities, averaged 123.9 points in January, down 0.4 percent from December. The decline reflects a combination of falling prices for sugar, dairy products, and meat, offsetting moderate gains in oils and cereals.
According to FAO data, sugar prices fell by 1 percent, dairy by 5 percent, and meat by 0.4 percent compared with the previous month. Vegetable oils, by contrast, recorded a monthly increase of 2.1 percent, with the price index reaching 168.6 points, or 10.2 percent higher than January 2025. The rise in oils was driven mainly by higher prices for soybean, sunflower, and palm oil. Palm oil, in particular, posted its second consecutive monthly increase, supported by seasonal production slowdowns in Southeast Asia and strong import demand linked to improved price competitiveness.
Cereal prices showed more modest movements, rising 0.2 percent from December. Wheat prices were broadly stable, while maize prices declined slightly, as ample global supplies outweighed the effects of strong demand, including ethanol production in the United States and weather-related uncertainties in Brazil and Argentina.
The January decline follows a year in which global food prices rose overall in 2025, ending two consecutive years of falling prices. Despite the recent softening, FAO analysts noted that prospects remain favorable for cereal markets. Global production is projected to reach 3.02 billion tons, supported by record harvests of wheat, maize, and rice. FAO also expects the global cereal stocks-to-use ratio to reach its highest level since 2001, providing a significant buffer against potential shortages and limiting the risk of sharp international price spikes.
FAO said that while declines in sugar, dairy, and meat helped ease pressures, the increases in vegetable oils and certain cereals highlight the ongoing influence of seasonal production patterns, trade dynamics, and climate variability. Analysts also noted that the continued expansion of global stocks, particularly for wheat and maize, has contributed to market stability.
The FAO food price index is widely regarded as a key benchmark for international food markets and a barometer of inflation pressures that can affect both importing and exporting countries. Economists suggest that the early 2026 decline in the index may provide relief for consumers, particularly in regions that rely heavily on imported food commodities.
However, the agency cautioned that markets remain vulnerable to geopolitical developments, climatic shocks, and trade disruptions. Persistent monitoring of production conditions, supply chains, and global demand is necessary to avoid sudden price spikes that could exacerbate food insecurity, particularly in developing countries.
The January figures come at a time when global grain supply is robust, largely due to favourable harvests and high stock levels. FAO emphasized that while certain commodity categories remain volatile, the combination of strong production and healthy inventories should help maintain relative stability in global food prices through the first half of 2026.
The downward trend in global food prices also underscores the ongoing importance of agricultural policy, trade flows, and investment in food systems to ensure long-term market resilience and accessibility, particularly for vulnerable populations.
FAO analysts said continued investment in monitoring, storage, and risk management will be crucial in ensuring that international markets remain responsive and that price stability benefits consumers worldwide, even as demand pressures continue to grow.
