Global Food Prices Ease at Year-End as Dairy, Meat and Oils Pull Index Lower
Global food prices edged lower in December, as declines in dairy, meat and vegetable oils offset higher cereal and sugar quotations, according to the FAO.
International food commodity prices closed the year with a moderate decline, reflecting easing pressure in key segments of the global agri-food market. According to the Food and Agriculture Organization of the United Nations, the FAO Food Price Index averaged 124.3 points in December, down 0.6% from November and 2.3% below its level a year earlier, as falling prices for dairy products, meat and vegetable oils more than compensated for gains in cereals and sugar.
Despite the year-end correction, the broader annual trend remained positive. Over 2025 as a whole, the index averaged 127.2 points, up 4.3% compared with 2024, driven mainly by higher global prices for vegetable oils and dairy products, while cereals and sugar posted annual declines.
Cereal prices moved higher in December, with the FAO Cereal Price Index rising on the back of renewed concerns over Black Sea wheat export flows, robust global maize import demand, strong domestic ethanol production in Brazil and the United States, and higher prices across all rice market segments. On an annual basis, however, cereals averaged 4.9% below 2024, marking a third consecutive yearly decline and the lowest annual level since 2020. Rice stood out, with prices averaging 35.2% below last year, reflecting ample exportable supplies, intense competition among exporters and softer demand from some Asian importers.
Vegetable oil prices edged slightly lower in December, reaching a six-month low, as declines in soybean, rapeseed and sunflower oil prices outweighed firmer palm oil quotations. Even so, 2025 marked a strong year for oils, with the index averaging 17.1% above 2024, supported by tight global supply conditions.
Meat prices also declined at the end of the year. The FAO Meat Price Index fell 1.3% month-on-month, although it remained 3.4% higher than in December 2024. Price declines were observed across all meat categories, particularly beef and poultry. Over the full year, meat prices averaged 5.1% above 2024, underpinned by strong global import demand and heightened market uncertainty linked to animal disease outbreaks and geopolitical tensions.
Dairy prices recorded the sharpest monthly drop, with the index falling 4.4% in December, led by a steep decline in butter prices due to greater seasonal cream availability in Europe. Still, dairy prices in 2025 averaged 13.2% higher than the previous year, reflecting solid global demand and limited export supplies earlier in the year.
Sugar prices moved in the opposite direction, rising 2.4% in December, mainly due to significant production declines in southern Brazil. Even with the rebound, sugar prices remained 24% below December 2024, and for 2025 as a whole the index averaged 17% lower, the lowest annual level since 2020, amid ample export availability.
Overall, the latest FAO data underline a gradual easing of global food price pressures toward the end of the year, while also highlighting the structural risks-from geopolitics to climate and supply constraints-that continue to shape the outlook for global agricultural markets in 2026.
