FAO Cereals Price Index

The index measures monthly changes in international export prices for the most widely traded cereals, weighted by their share of global trade. Quotations are collected from major exporting countries and expressed relative to the 2014–2016 reference period, when the index is defined as 100. A reading above 100 indicates that cereal prices have risen relative to that baseline, while a reading below 100 indicates they have fallen.

• •Covers wheat, maize, rice, barley, sorghum, and oats in a single composite
• •Index reference period is 2014–2016, set equal to 100
• •A reading of 110.2 implies prices roughly 10% above the 2014–2016 average

Harvest conditions in major producing regions such as the United States, the European Union, Russia, Ukraine, India, and Argentina have an outsized influence on the index because they shape global exportable supply. Energy prices affect cereals through transport, drying, and fertilizer costs, while currency movements — particularly a weaker US dollar — can lift dollar-denominated prices. Trade policy actions, including export bans or quotas, can also produce sharp short-term spikes.

• •Weather and harvest size in key exporting countries
• •Energy and fertilizer costs that raise production expenses
• •Exchange rates, especially movements in the US dollar

Cereal prices surged to record highs in 2022 following Russia’s invasion of Ukraine, which disrupted Black Sea exports of wheat and maize, before easing through 2023 as alternative supply routes opened and harvests recovered. The index then drifted lower through 2024 amid generally favorable production outlooks, although rice remained an outlier after India’s 2023 export curbs. Recent monthly readings near 110 suggest prices have stabilized only modestly above the long-run reference level, with wheat and maize softer but rice and sorghum firmer.

• •Peaked in 2022 after the Black Sea export disruption
• •Eased through 2023–2024 as global supply improved
• •Current reading near 110 indicates prices modestly above the 2014–2016 baseline

On the supply side, the index is driven by global cereal production, which the FAO routinely forecasts at around 2.8 billion tonnes annually, and by stock levels held by major exporters and China. On the demand side, roughly half of all cereals are used as livestock feed, with food consumption and industrial uses such as biofuels making up most of the rest. Tight stocks combined with strong feed or biofuel demand tend to push the index higher, while consecutive bumper harvests rebuild inventories and weigh on prices.

• •About half of global cereals go to animal feed
• •Stocks-to-use ratios signal how exposed markets are to shortfalls
• •Biofuel mandates add a structural source of demand

Near-term movements in the index will hinge on Northern Hemisphere 2025 harvest results, the duration of any Black Sea shipping disruptions, and the pace at which China and other importers rebuild or draw down inventories. El Niño or La Niña weather shifts could also revive volatility in maize, rice, and wheat. Over the medium term, structural demand from growing meat consumption in emerging Asia and the expanding use of crops for biofuels is expected to keep prices biased above the 2014–2016 reference, even as yield improvements add to supply.

• •Weather-driven harvest risk remains the dominant near-term variable
• •Asian feed demand and biofuel use underpin a long-run floor under prices
• •Export policy decisions in major trading nations can trigger sudden spikes