Global food prices experienced a sharp increase of 1.6% in February 2025, primarily driven by the soaring costs of vegetable oil, sugar, and dairy products, according to a report released by the UN Food and Agriculture Organization (FAO) on Friday. The FAO Food Price Index, which monitors monthly price changes of major global food commodities, rose to 127.1 points in February, marking a 1.6% increase from January and an 8.2% rise from February 2024.
Sugar Prices Soar Amid Tight Global Supply
The most significant price increase was witnessed in sugar prices, which surged by 6.6% in February compared to January 2025. According to the FAO, the surge was fueled by looming global supply shortages for the 2024/25 season, primarily caused by prolonged dry weather in Brazil and depressed production in India — the world’s two largest sugar producers.
The report also highlighted that sugarcane production in Brazil was heavily impacted by unfavorable weather conditions, while India’s output was lowered due to delayed monsoons and shrinking harvesting areas. This global supply shortage has forced importing countries to pay higher prices, subsequently driving the overall global food price index higher.
Dairy Products Witness Sharp Price Hike
Another notable increase was recorded in the dairy sector, with the FAO Dairy Price Index climbing 4% in February. This increase was mainly driven by strong import demand in Europe, especially for milk powder and cheese, which exceeded the current production output in Oceania.
The higher dairy prices are also attributed to rising demand in Asian markets, especially in China and India, coupled with production challenges in key dairy-producing countries like New Zealand and Australia.
“The supply-demand imbalance in the global dairy market continues to push prices upward,” the FAO noted.
Vegetable Oil Prices Surge Amid Lower Output
The vegetable oil sector also recorded a significant price surge in February, with the FAO Vegetable Oil Price Index jumping 5.4% from January. The increase was mainly fueled by reduced output in Southeast Asia and strong demand from the biodiesel industry in Indonesia.