Global prices for vegetable oil and butter soared in March – FAO

Global prices for vegetable oil and butter are rising, mainly due to reduced production and high demand. This is evidenced by a review of global price indices from the UN Food Agency – FAO, reports UNN.

The FAO Food Price Index (FFPI) averaged 127.1 points in March 2025, almost unchanged from February. Declines in cereal and sugar price indices offset increases in meat and vegetable oil prices. Meanwhile, the dairy price index remained stable

In year-on-year terms, the FAO Food Price Index exceeded the corresponding figure for last year by 8.2 points (6.9%), but remained 33.1 points (20.7%) below the peak reached in March-2022.

Vegetable oilIn particular, the average FAO vegetable oil price index in March was 161.8 points, up 5.8 points (3.7%) from February and significantly higher (23.9%) than a year ago.

The continued rise in the index is due to higher prices for palm, soybean, rapeseed and sunflower oil. International palm oil prices have been rising for the second month in a row, mainly due to persistently tight supplies in the major Southeast Asian producing countries, where production was at a seasonal low.

At the same time, global soybean oil quotations rose due to significant global import demand due to its price competitiveness compared to other oils, despite low demand from the biofuel sector, especially in the US.

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Dairy productsThe FAO dairy price index in March was 148.7 points, unchanged from February-2025, but 24.6 points (19.9%) higher than last year.

The stability of the index reflects lower cheese prices, offset by higher butter and milk powder quotations. International butter prices have been rising for the third month in a row – by 3.9% compared to February, thanks to strong retail sales and growing international demand amid seasonal supply cuts in Oceania and sluggish production in Europe.

Skimmed milk powder prices are rising for the second month in a row due to a combination of high demand and shrinking supply.

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CerealsThe cereal price index fell to 109.7 points in March, down 2.9 points (2.6%) from February and 1.2 points (1.1 percent) lower than in March 2024. Global wheat prices fell slightly in March as concerns about crop conditions eased in some major Northern Hemisphere exporters. Uncertainty about rising trade tensions has affected market sentiment.

However, the fall in prices in the grain segment was mitigated by currency fluctuations, increased supply from Russia and Turkey’s abolition of wheat import quotas. After several consecutive monthly increases, global corn prices also fell in March, due to improved planting conditions in Brazil after recent rains, the start of harvesting in Argentina, negative forecasts for the upcoming season in the US, weaker-than-expected import demand from China and concerns about changes in trade policies in various countries.

MeatThe average FAO meat price index rose to 118.0 points in March, up 1.0 point (0.9%) from February and 3.1 points (2.7%) higher year-on-year.

The growth in this market segment is due to higher pork prices due to increased quotations in the EU after Germany regained its foot-and-mouth disease-free status. This prompted key trading partners, such as Britain and Northern Ireland, to lift import bans. Increased demand helped stabilise the market, while the strengthening of the euro against the US dollar supported the upward trend.

Lamb prices also rose due to high global demand ahead of the Easter holidays. Similarly, global beef quotations rose, reflecting tight global supplies and strong international demand. At the same time, poultry prices remained largely stable as global supply and demand are currently in balance.

SupplementThe FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices, weighted by the average export shares of each group over 2014-2016. A thematic article published in the June 2020 issue of the Food Outlook presents a revision of the base period for the calculation of the FFPI and an extension of its price coverage, which will be implemented from July 2020. The November 2013 article contains technical information on the previous construction of the FFPI.