The FAO Food Price Index averaged 128.8 points in September, down from 129.7 in August as weaker prices for cereals, dairy, sugar, and vegetable oils outweighed an uptick in meat values. Despite the monthly dip, the index stood 4.2 points higher than September 2024, though it remains 31.4 points lower than the March 2022 peak.

The Cereal Price Index fell to 105.0 points, 7.5% lower year-over-year. Wheat prices declined for the third straight month on the back of large harvests and subdued global demand. Corn prices also weakened, pressured by forecasts of abundant export supplies and Argentina's temporary suspension of grain export taxes. By contrast, barley and sorghum recorded price increases, with barley notching its third consecutive monthly rise.

The Vegetable Oil Price Index averaged 167.9 points, down 0.7% from August but still 18% above a year earlier. Palm oil values slipped amid higher-than-expected Malaysian stocks, which reached a 20-month high. Global soy oil prices dropped for a second straight month, reflecting increased Argentine supplies following the suspension of soybean export taxes. On the other hand, sunflower and rapeseed oils climbed further, supported by supply constraints in the Black Sea region and Europe.

In dairy and sugar, modest declines also contributed to the overall index downturn, although prices remain historically elevated compared to pre-2020 levels. The meat index provided the lone increase in September, underpinned by firm demand in Asia.

While global commodity markets have stabilized since the turbulence of 2022, analysts warn that weather volatility, trade policy shifts, and export restrictions could quickly renew pressure. For U.S. producers, softer international prices may weigh on export margins even as domestic input costs remain high.