Food commodities have had a tough time of it lately. With yields going down in coffee, corn and cocoa, leading to skyrocketing prices, the situation has led some to speculate that a crisis is on the horizon.
However, with some caveats, things may be looking up. The price of cocoa has begun to stabilise after a long period of volatility, and even sugar prices are falling.
In fact, most food commodities around the world are expected to increase their output in the short term, according to a recent report by the Food and Agriculture Organisation (FAO).
Despite this, demand may sometimes outpace supply, meaning that increased production will not always satisfy the needs it is meant to.
Production for major crops expected to increase
Production for most of the world’s essential food crops is expected to increase, according to the FAO’s Food Outlook report. However, this does not necessarily mean a bright future for all commodities in question.
Wheat is the perfect example of this dichotomy. On the one hand, it is expected to increase production in 2025, albeit by only 0.3%. On the other, this will go up against a greater increase in demand - global utilisation of wheat is expected to rise by 1.3% in 2025/26 - leading to a contraction of global wheat stocks by 2.2%. This demand could push up international wheat prices.
However, some growth projected is far from modest. Output of rice, maize, sorghum and oilseeds will not only grow, but reach record levels.
Rice, for example, is expected to grow by 0.9% in 2025/26, and experience a 1.4% increase in international trade by the end of 2025. This is due to demand from Africa and rising exports from India and South America. This coincides with near-three-year lows in price.
Soybean will lead the oilseed category with a year-on-year growth of 6.1% in 2024/25, offsetting the modest performance of other oilseeds, with a good harvest in Brazil and increased production in the US bringing it up.
Meat and fish to increase production
Alongside crops, output of meat is expected to increase, although this won’t necessarily mean lower prices.
Meat production will increase, but by 0.6%, more modestly than in previous years. This will be mainly driven by poultry production, with the production of bovine meat actually going down somewhat.
This increase will be paired with high global demand, mainly for poultry due to its affordability. This is in spite of frequent bird flu outbreaks.
The international meat price will likely continue to increase, suggests the report, due to disease outbreak and trade tensions around the world.
Meanwhile, output from fisheries and aquaculture is expected to grow only 1.5% in 2025. Conversely, the impact of tariffs may restrict market access, and production costs are rising.
The value of world trade in aquatic animal products is expected to expand by 1.7%, to $183.8bn (€158.8bn), whilst trade volumes only rise by 0.5%.
World milk production to continue expanding
Production of milk will continue to expand, according to the FAO report. However, this expansion will take place at a slower pace for the second year in a row, growing by a measly 1%.
Meanwhile, demand for dairy products has not recovered as well as expected following previous high prices.
The global dairy trade is actually expected to decline by 0.8%, due to lower-than-expected production of milk and high international prices.
What’s going on with sugar?
Sugar, despite reports of falling prices, is not predicted to increase production.
International sugar markets are expected to face a 2.2m tonne production deficit in 2024/25. Global sugar production in this season is expected to be 175.6m tonnes, a 3.9% decrease from the previous season.
The FAO’s report suggests that outputs in key producing countries, including Brazil and India, will decrease. These will outweigh projected output recoveries in Thailand and increased outputs in the EU and China.
Meanwhile, global sugar consumption is expected to rise only modestly, by less than 1%.
Eventually, the global sugar trade is likely to contract by 6% compared to the previous season. This is because of the anticipated reduction of exportable supplies in Brazil and India.
