Global Food Prices to Drop by 7% in 2025, Led by Declining Rice Costs-GHANA
Global food prices are expected to see a significant decline in 2025, marking a second consecutive year of lower costs. The World Bank’s latest forecast predicts a 7% decrease in the global food price index, with a major contributor being the sharp drop in rice prices. This decline is attributed to abundant global supply and the easing of export restrictions, particularly from India, the world’s largest rice exporter.
Among the various food categories, grains are set to experience the steepest price reductions, with an 11% overall drop expected. The most substantial fall is projected for rice, which is anticipated to see a dramatic 29% plunge. This drop is largely due to an expected 5% increase in India’s rice production for the 2024-25 season and a 2% global rise in production, aided by the easing of India’s export restrictions.
While rice prices are expected to recover gradually in 2026 as both supply and demand stabilize, the 2025 outlook remains one of price decreases. The International Grains Council’s early estimates suggest a stable rice market in the near future, following the short-term downturn. Wheat prices are also forecasted to decline, though the drop may be softened by tight supply conditions, particularly given that wheat output, despite nearing record levels, is still expected to fall short of consumption needs.
Maize prices, while also expected to ease in both 2025 and 2026, will face downward pressure from multiple factors. These include weaker demand for ethanol, driven by falling crude oil prices, and trade tariffs between the U.S. and China. Furthermore, maize’s price advantage over wheat and soybeans is expected to incentivize expanded cultivation, which will add further pressure on prices.
However, despite the anticipated decreases in commodity prices, some limits to the drop are expected. Global stock levels, especially for grains, are at historically low levels and are projected to hit their lowest point in over a decade. This could prevent the full extent of the price decreases and stabilize the market in the longer term.
Source: Citi newsroom