FAO food price index rises slightly amid mixed commodity outlook
The Food and Agriculture Organization of the United Nations (FAO) Index for April 2025 released last week, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 128.3 points in April, up 1.0 percent from March and 7.6 percent from the same month last year
Image: Supplied
The Food and Agriculture Organization of the United Nations (FAO) has reported a modest increase in its food price index, highlighting ongoing fluctuations in global commodity markets as supply and demand dynamics play a pivotal role in shaping consumer costs.
In its latest release, the FAO Index for April 2025 averaged 128.3 points, marking a 1.0% rise from March and a significant 7.6% leap from the same month last year.
Key contributors to this uptick included commodities like wheat, maize, meat, and dairy products.
The FAO's Cereal Price Index climbed by 1.2% from March, with global wheat prices experiencing a slight boost attributed to reduced exportable supplies in the Russian Federation.
Additionally, heightened demand for aromatic rice types contributed to an increase in the FAO All Rice Price Index, signalling robust consumer interest.
Furthermore, seasonally tighter stock levels in the United States pushed international maize prices higher, exacerbated by recent adjustments to the US import tariff policies.
With exemptions for Mexico, the largest importer of US maize, and a temporary pause on tariffs above 10% for certain trading partners, market dynamics remained precarious.
The FAO Meat Price Index also saw a notable increase of 3.2% compared to March. The rise was informed by consistent international demand amid limited supply, particularly for pig meat and bovine varieties, which firmed notably in markets like Australia and Brazil.
The Dairy Price Index surged by 2.4% over the previous month, further reflecting a staggering 22.9% increase since last year. However, this was tempered by the FAO Vegetable Oil Price Index, which declined by 2.3%, although it remains 20.7% higher than its year-ago level.
Surges in palm oil outputs from Southeast Asian producers allowed for markdowns, while prices for soy and rapeseed oils climbed due to solid global demand.
Conversely, the Sugar Price Index experienced a 3.5% decrease since March, a move largely driven by increasing concerns over the uncertain global economic landscape, which could affect sugar consumption in both the beverage and food processing sectors.
Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, said that the index was up 8% from the same period last year but still 20% down from its peak in March 2022, a month after Russia invaded Ukraine, leading to a surge in grains and oilseeds prices.
Sihlobo said the mild uptick in the prices of grains, dairy, and meat had underpinned the index's mild increase in recent months.
'In the case of dairy and meat prices, there is a rise in demand, particularly in the EU area, combined with tight supplies in some places that have struggled with animal diseases. These will likely be temporary and generally mild as the supplies recover in the coming months,' he said.
Sihlobo said that in the case of grains, the price increases reflect the tighter supplies in the Black Sea region.
'But this, too, may be short-lived as the general production outlook is optimistic. For example, the International Grains Council forecasts the 2025-26 global grain production to be 2.4 billion tons, up 4% from the previous year. This forecast comprises all major global soft commodities – maize, wheat, rice, and soybeans.'
Sihlobo added that a closer look at the data shows that the 2025-26 global maize production is forecast at 1.3 billion tons, up 8% year-on-year.
'The uptick is expected to be in all major maize-producing regions worldwide. The 2025-26 global wheat crop is forecast at 805 million tons, up 1% from the previous season. The 2025-26 global rice production is estimated at 540 million tons, up 1% from the prior season,' he said.
'The 2025-26 global soybean crop is estimated at 428 million tonnes, up 3% from the previous season. This is an encouraging outlook for South Africa's consumer. South Africa generally imports around 1.8 million tons of wheat yearly, just under half of the country's annual consumption.'
BUSINESS REPORT
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
15 hours ago
- The Citizen
Ban on Brazil poultry imports adds to SA food insecurity
The country's agricultural sector faces setbacks from disease outbreaks and food insecurity affecting millions of households. While the year began on a positive note for South Africa's agriculture, particularly in terms of exports, this is no time for celebration, said Agricultural Business Chamber of South Africa chief economist Wandile Sihlobo yesterday. 'We face serious challenges in South Africa's agriculture, the most pressing one being foot-and-mouth disease (FMD),' he said. Brazil ban disrupts South Africa's poultry supply 'Another issue we are monitoring is the impact on poultry supplies resulting from the ban on Brazil's poultry imports due to the avian influenza outbreak in that country.' In February, Statistics South Africa noted that the General Household Survey in 2019, 2022 and 2023 indicated households in South Africa continue to experience challenges related to both moderate to severe and severe food insecurity, despite the country being generally food secure at the national level. The report suggests in 2023, about 19.7% (roughly 3.7 million households) experienced moderate to severe food insecurity while about 8% (1.5 million households) experienced severe food insecurity. Sihlobo said there are ways of addressing the concerns of poultry supplies by restricting imports from affected regions, rather than the whole country, a step that Namibia has taken. Call for more targeted import restrictions and better data 'It is also in this perspective that I worry about the constant news flow that suggests South Africa will face a food crisis if we temporarily limit Brazil's poultry imports,' he said. 'It would have been much more helpful to provide regulators with valuable insights and data on imports, as well as potential opportunities for the future so that they could make informed decisions.' ALSO READ: Industry warns of meat price spike and hunger as SA faces supply crisis Sihlobo said a ban on imports was costly and may have implications for jobs in the importing businesses. 'However, this is not a permanent decision and regulators continually assess issues, taking into account the impact of their decisions on the value chain,' he said. 'What we should help them with is valuable data to aid their choices. This is not the time for the economics of Chicken Little. We need poultry imports. South Africa imports roughly 20% of its annual poultry consumption and Brazil is the major supplier – that is clear. 'However, the path now lies in navigating the issue delicately. We must also be extra cautious when outbreaks occur and allow scientists the space to make informed judgments.' Farmers raise alarm over FMD impact and vaccination costs Free state cattle farmer Tewie Wessels said he was very unhappy about the outbreak of FMD. 'What happens at the end of the day, is the farmer and the consumer will come short and take the knock,' said Wessels. A farmer, who agreed to speak anonymously, said there was more to FMD than meets the eye. The farmer said it didn't affect a small-scale farmer with 10 cattle, but large-scale farmers with 1 000 cattle. 'It's a money-making scheme because the only solution at the end of the day is to vaccinate all our cattle.' NOW READ: Will SA run out of beef and chicken? Animal disease hits SA's top producer — what it means for consumers
IOL News
4 days ago
- IOL News
Household budgets feel the pinch as food prices jump in May 2025
The May 2025 Pietermaritzburg Economic Justice & Dignity's Household Affordability Index reports a notable increase in the average cost of basic food items. Image: Tracey Adams/Independent Newspapers The May 2025 Pietermaritzburg Economic Justice & Dignity's Household Affordability Index reports a notable increase in the average cost of basic food items. Tracking prices of 44 food staples across 47 supermarkets and 32 butcheries in several cities, the Index reveals that the average Household Food Basket now costs R5,466.59, marking a R46.29 (0.9%) jump from April 2025 and a R136.29 (2.6%) rise from May 2024. Food inflation continues to be a critical concern as the Index indicates that of the 44 foods monitored, a staggering 33 items saw a price increase in May. Price escalations were particularly pronounced among essential staples, with onions surging by 23%, butternut rising by 9%, and carrots increasing by 8%. In contrast, only 11 foods registered a decrease in price, with rice witnessing a reduction of 5% and tomatoes dropping by 9%. The trend of rising food prices varies across different regions of South Africa. The Johannesburg food basket increased by R51.00 (0.9%) month-on-month, reaching R5,610.46. Meanwhile, Cape Town experienced the sharpest increase, with prices soaring by R112.62 (2.1%) from April to May. In stark contrast, the Springbok region saw a small decline of R28.90 (-0.5%) month-on-month, although its food prices remain 5.4% higher year-on-year. Statistics South Africa reveals that headline inflation for April 2025 stood at 2.8%, while food inflation reached a higher 3.3%. For households relying on the National Minimum Wage, which stands at R4,836.72 monthly, the financial struggle is becoming increasingly palpable. With the average cost for a basic nutritional food basket for a family of four estimated at R3,843.40, workers face a dire situation where essentials consume a majority of their income. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The findings from this Month's Index further elucidate this concern. With transport and electricity alone taking up 56.3% of a worker's wage, families are left with only R2,113.75 to allocate for all remaining expenses, including food. Even allocating this amount entirely to food would provide a mere R528.44 per person per month—falling short of the food poverty line of R796. The implications for children are particularly troubling. The average cost to provide a child with a basic nutritious diet is now R979.66, while the Child Support Grant of R560 is significantly below the food poverty line, rendering it inadequate for meeting basic nutritional needs. The escalating costs emphasize the urgent need for policy responses to address food insecurity and support the most vulnerable sectors of society. Additionally, while the overall cost of household domestic and personal hygiene products saw a slight decrease of R3.58 (-0.3%) in May, the year-on-year increase underscores that these essential products continue to strain household budgets, further intensifying the financial burden on families. IOL
IOL News
4 days ago
- IOL News
What do agriculture experts predict for South Africa's GDP growth in 2025?
There have been mixed reactions from the Agriculture sector and economists on expectations for Tuesday's announcement of the GDP growth for the first quarter of 2025. There have been mixed reactions from the agriculture sector and economists on expectations for Tuesday's announcement of the GDP growth for the first quarter of 2025. Wandile Sihlobo, the chief economist of the Agricultural Business Chamber of South Africa (Agbiz), said, 'One sector that some may be observing is the performance of agriculture, which last year was a significant drag on the economy. The mid-summer drought, delays in harvesting deliveries, and animal diseases were some of the challenges we encountered in 2024.' This year, the conversation should shift somewhat and become more upbeat. 'We have an excellent summer grains and oilseeds season, with the latest production forecasts by the Crop Estimates Committee suggesting a harvest of 17.98 million tonnes, up by 16% from the 2023-24 drought season. Favourable rains and decent area plantings support this,' he said. Sihlobo said South African sugar production for the 2024-25 production season is forecast to recover by 7% year-on-year to 2.09 million tonnes. 'This is also due to favourable weather conditions and the availability of sufficient water for irrigation. We have also received encouraging production data from SA Wine and Vinpro, forecasting South Africa's wine grape harvest at 1.244 million tonnes, an 11% recovery from the exceptionally poor harvest of 2024. We also see encouraging production data from citrus, various fruits, and vegetables. In poultry production, the moderating prices of maize and soybeans should help the industry in its ongoing recovery.' Sihlobo said the one area that remains a concern is the livestock industry, primarily due to the recent outbreak of foot-and-mouth disease. 'We have already seen various trading partners temporarily banning South Africa's beef exports due to the foot-and-mouth disease outbreak. Given the sizable share contribution of the livestock industry to South Africa's agricultural gross value added, its challenges are something worth reflecting on when considering South African agricultural performance.' Francois Rossouw, the CEO of Southern African Agri Initiative (Saai), said the sector is certainly in a recovery period after the excessive rain the country had. 'It was positive to see a healthy jump in our exports in the first quarter of the year, helped a bit by things running smoother at the ports. However, there are big external challenges ahead, especially when it comes to securing good access to important markets like the US and navigating hurdles in promising places like China. So, while there's some positive momentum, the outlook is definitely shaped by these significant trade issues that need sorting out.' Investec economist, Lara Hodes, said that they expect a weak quarter one 2025 reading, following quarter four 2024's 0.6% quarter-on-quarter seasonally adjusted lift, with incoming data readings for the quarter unfavourable. Specifically, industrial production (mining, manufacturing and electricity), which makes up a substantial 19.5% of GDP, declined by -2.9% qqsa in the first quarter, while the trade sector, which makes up around a further 12.5% of GDP, disappointed, she said. Hodes said the outlook is reflective of a still subdued economy, which continues to face a number of challenges, notably on the logistics front. 'Business Confidence is likely to have remained in contractionary territory at around 47, from 45 logged in Q4.24 and Q3.24 respectively. While political uncertainty has eased to an extent and the GNU is expected to endure, domestic growth remains lacklustre while global uncertainty remains elevated, with the tariff situation fluid.' Johann Els, Old Mutual Group Chief economist, said that given the performance of high-frequency data, he expects GDP growth to be negative. 'I project GDP to be - 0.1% in the first quarter of 2025. This compares to a +0.6% growth in the last quarter of 2024. The reason for the negative projection is the severe production performance in the mining and manufacturing sectors. Mining production, with a weight of 4.8% into the economy, was down more than 16% on an annual basis quarter-on-quarter, and similarly, manufacturing production at a bigger weight of 12.5% of the economy was down 9% on an annual basis quarter-on-quarter.' TLU SA general manager, Bennie van Zyl, said that there are so many interchangeables in the Agriculture sector that it is difficult to compare one year to next year. 'This is due to us having late rain, but it could still result in a good harvest. There are also farmers that haven't harvested yield yet due to the late rains. We also have farmers who are not able to sell cattle due to foot-and-mouth disease, so we have to wait and see. I'm cautious to make a prediction on the sector GDP growth.' BUSINESS REPORT Visit:
