FAO predicts stable food commodity markets for 2024/25 despite potential risks

14 June 20246 min reading

Supplies of most of the world’s major food commodities are expected to be adequate in 2024/25, although extreme weather, rising geopolitical tensions, sudden policy changes and other factors could all potentially tip the delicate global demand-supply balances and impact prices and global food security, according to a new report from the Food and Agriculture Organization of the United Nations (FAO).

The latest FAO Food Outlook, a biannual publication, offers updated forecasts for the production, trade, utilization and stocks of major food staples. On the production side, world outputs of rice and oilseeds are expected to be at record levels, while those of wheat and maize will likely decline modestly. The Food Outlook provides detailed market assessments for wheat, coarse grains, rice, oilcrops, sugar, meat, dairy products and fisheries.

FAO’s first forecast for the 2024/25 season points to an overall comfortable global supply-and-demand situation. Current prospects for world alcereal production indicate an output of 2 846 million tonnes, virtually on par with the record outturn in 2023/24. Among the major cereals, global maize and wheat outputs are forecast to decline. The recent adverse weather conditions in the Black Sea region will likely result in a downgrade in world wheat production. By contrast, outputs of barley, rice and sorghum are all predicted to increase.

World cereal stocks will likely increase by 1.5 percent (13.2 million tonnes) above their opening levels to a record 897 million tonnes, reflecting expectations of higher inventories of coarse grains (with increases for maize, barley and sorghum) and rice. By contrast, wheat stocks could decline to their lowest level since 2021/22. With utilization also forecast to rise in 2024/25, the global cereal stock-to-use ratio will likely remain close to its 2023/24 level, around 30.9 percent.

Forecast at 481 million tonnes, world trade in cereals is predicted to decline by 1.3 percent from the 2023/24 level to 481 million tonnes in 2024/25. Lower trade prospects for maize underlie most of this anticipated decline, with smaller decreases in wheat and barley trade also contributing to the contraction. By contrast, international rice trade is forecast to recover.


In 2024, global wheat production is expected to decrease marginally (0.1 percent) from the previous season’s level down to 787 million tonnes. Most of the downturn in output is expected to result from foreseen production declines in the European Union, Ukraine, Türkiye, the United Kingdom of Great Britain and Northern Ireland and Morocco. The recent adverse weather conditions in the Black Sea region will likely result in a downgrade in world wheat production.

With global production forecast to fall short of utilization, world wheat stocks are likely to decrease from their opening levels by 1.6 percent to 307 million tonnes by the close of seasons in 2025. Although this would mark a second consecutive year-on-year decline, the world wheat stocksto-use ratio forecast for 2024/25, which now stands at 38.0 percent, indicates an overall comfortable supply level. A significant drop expected in the European Union’s inventories accounts for most of the forecast global drawdown, with smaller decreases foreseen in Kazakhstan and the Russian Federation. Helping to balance those declines, stocks should increase in China, India and the United States of America.

The preliminary forecast for world trade in wheat in 2024/25 (July/June) stands at 198 million tonnes, indicating a potential 1.2 percent contraction from the 2023/24 level. The decline mainly stems from anticipated lower imports by China and the European Union, along with smaller export volumes expected from the Russian Federation, Ukraine and Türkiye.

International wheat export prices continued a steady downward trend over the 2023/24 season, reflecting ample supplies and strong competition among exporters, especially from robust, competitively priced exports from the Russian Federation. With the 2024/25 season about to start, world wheat prices are below their levels of last year as well as their five-year average values. With expectations of falling global utilization and larger harvests in several major exporting countries, wheat markets will likely remain under downward pressure in 2024/25.


The Food Outlook also provides FAO’s preliminary estimate for the global food import bill in 2024, forecast to rise by 2.5 percent to exceed $2 trillion. Those projections are driven by relatively favourable macroeconomic conditions, including steady global economic growth, and lower food commodity prices.

The new edition of the report has a special chapter on the dynamic effects of shocks to shipping costs on the food import bill – a topical variable given conflict-derived volatility on the Black Sea and Red Sea routes and due to drought impacts on the Panama Canal. The analysis shows that these shocks have a positive impact on the value of the FIB in the short term, with a larger effect on the group of net food-importing developing countries (NFIDCs).


The Food Outlook also includes a special chapter focusing on fertilizers, offering a comprehensive review of global fertilizer trade between 2021 and 2023 and a short-term market outlook for 2024/25. The chapter tracks the series of shocks, including the war in Ukraine, that directly or indirectly had an impact on primary nutrients such as nitrogen, phosphorus and potassium. Soaring natural gas prices were a major catalyst, rendering fertilizer production uneconomic, while other factors, including shipping and insurance costs as well as trade measures, also drove world fertilizer prices higher. The shocks led to a significant contraction in fertilizer trade in 2022 with a rebound in 2023 to similar levels of 2021.

The article shows that in April 2024, fertilizer prices as presented by a basket of nitrogen, phosphorus and potassium prices, averaged $327 per tonne, compared to $815 in April 2022. With the decline in prices, fertilizer trade volumes have rebounded with Nitrogen trade close to its 2021 level. Overall, the short-term outlook for fertilizers suggests stability over the next six months, according to FAO, with improved availability and affordability across the three main ingredients. Future shocks to global fertilizer markets are likely to be determined by developments in energy markets due to geopolitical or other causes.

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