Global food prices are projected to decline in 2025, offering some relief to households and economies battling high inflation.
According to the World Bank’s latest Commodity Markets Outlook, the Food Price Index is expected to fall by 7% year-on-year in 2025, with key components—grains, oils, and other food products—also registering significant declines. The report attributes the downward trend to improved global supply conditions and shifting trade policies, particularly in major agricultural economies like India.
Grain prices are projected to experience the steepest fall among food commodities, with an 11% decline expected in 2025. This drop is largely attributed to a significant plunge in rice prices, which are forecast to fall by as much as 29%. The World Bank notes that this dramatic decrease reflects a combination of ample global supplies and the relaxation of export restrictions by India, the world’s leading rice exporter.
India, which accounts for roughly 40% of global rice exports, is anticipated to see a 5% rise in rice production in the 2024–25 season. Globally, rice output is expected to increase by 2%, ensuring that supply comfortably meets rising demand. With export barriers lifting, the international rice market is poised for increased trade flow, further exerting downward pressure on prices.
Alongside grains, oils are expected to see a 7% price drop in 2025. The outlook reflects improved oilseed crop yields and more stable energy markets, which influence biofuel demand. As crude oil prices soften, demand for oil-based biofuels declines, freeing up more vegetable oils for food use and easing upward price pressure.
The World Bank attributed part of the anticipated price softening to improved soybean output and expanded planting areas. This increase in availability, combined with more favorable trade conditions in key producing regions, supports a more balanced global supply-demand outlook for oils.
Other Foods to Decline by 5%
The category labeled as “other foods” by the World Bank—which includes sugar, meat, dairy, and other edible products—is projected to decline by 5% in 2025. These declines are generally associated with improved production forecasts and stable global inventories. While each sub-category within this group faces unique market dynamics, the overall trend suggests a cooling of food inflationary pressures.
Although this category is broad, its decline supports the overall 7% reduction in the Food Price Index forecasted for 2025. Notably, stable prices for dairy and meat are tied to recovering livestock sectors and easing input costs, particularly feed and energy.
Looking ahead to 2026, the World Bank expects food prices to remain broadly stable. While the steep drops predicted for 2025 may not continue into the following year, none of the food sub-components are projected to experience significant increases. For example, rice prices are expected to stabilize as supply and consumption rise in tandem, keeping global markets balanced.
Similarly, wheat prices are forecast to ease slightly in 2025–26. However, this trend is tempered by trade tensions and tight supply conditions. The World Bank suggests that while near-record wheat production is expected, it may be marginally outpaced by rising consumption, thereby reducing global stock levels.
Maize Prices to Edge Down Despite Supply Constraints
Maize prices are also expected to fall by 2% in both 2025 and 2026. The decline is driven by several factors, including reduced ethanol demand due to lower crude oil prices and rising tariffs on U.S.-China agricultural trade. Additionally, maize has recently enjoyed a price advantage over soybeans and wheat, encouraging farmers to expand maize acreage.
Despite this increased production forecast, the downward trend in maize prices may be constrained by limited global inventories. The World Bank projects maize stocks to fall to their lowest levels in over a decade, which could place a floor under price declines.
The projected decline in food prices could bring much-needed relief to millions of households across the globe, particularly in low- and middle-income countries where food costs account for a significant portion of consumer spending. However, the World Bank cautions that while prices may fall, they are doing so from historically high levels driven by previous supply shocks, geopolitical tensions, and climate-related disruptions.
Furthermore, the expected stabilization in 2026 means that any shocks—such as extreme weather events or renewed trade restrictions—could quickly reverse the downward trend.
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