Global food prices declined again in January 2026, marking the fifth consecutive monthly drop, according to the Food and Agriculture Organization of the United Nations (FAO). The FAO Food Price Index averaged 123.9 points, down 0.4% from December and 0.6% year-on-year, reinforcing a trend that matters for import-dependent countries, agribusiness margins and global inflation outlooks.

The decline was led by dairy, sugar and meat, offering short-term relief to food-importing economies. However, the broader picture remains mixed as cereals and vegetable oils moved in opposite directions, reflecting regional weather risks, stock levels and biofuel demand.

Cereal prices were broadly stable, with the FAO Cereal Price Index edging 0.2% higher. Lower prices for wheat and maize were offset by concerns over weather conditions in key producing regions. Large global wheat stocks helped absorb risks in Russia and the United States, while strong ethanol demand in the U.S. balanced adverse weather impacts in Argentina and Brazil. By contrast, rice prices rose 1.8%, driven by stronger demand for premium and fragrant varieties.

Vegetable oils turned upward, with the FAO Vegetable Oil Price Index increasing 2.1%. Palm oil prices climbed amid seasonal production slowdowns in Southeast Asia, while soy oil rebounded due to tighter export availability in South America and expectations of higher biofuel demand in the U.S. Sunflower oil also rose, reflecting supply constraints in the Black Sea region, while rapeseed oil eased on ample EU supplies.

Meat prices softened, led by lower pig meat quotations amid abundant supplies and subdued demand. Poultry prices increased, supported by strong export demand and higher prices in Brazil, while beef prices remained stable, helped by increased shipments from Brazil to China after the rapid exhaustion of the U.S. tariff-free quota.

The sharpest monthly adjustment came from dairy, where prices dropped 5%, mainly due to lower cheese and butter prices amid ample availability. Meanwhile, skim milk powder firmed, supported by renewed demand from North Africa, the Middle East and parts of Asia. Sugar prices fell 1%, reflecting expectations of higher output in India, favorable prospects in Thailand, and a positive production outlook in Brazil.

Beyond prices, FAO's latest outlook highlights a structurally well-supplied cereal market. Global cereal production in 2025 is forecast at 3.023 billion tonnes, with record harvests for wheat, coarse grains and rice. Improved yields in Argentina, Canada and the European Union, combined with expanded maize output in China and the United States, underpin the forecast.

FAO also projects global cereal stocks to rise 7.8% in 2025/26, pushing the stocks-to-use ratio to 31.8%, the highest level since 2001. World cereal trade is expected to grow 3.6%, signaling active global flows despite easing prices.

While January confirms a cooling trend in global food prices, FAO data suggests markets remain finely balanced, with weather, energy policy and trade dynamics set to define the next phase of price movements in 2026.