Global food prices to drop by 7% in 2025 amid sharp decline in rice costs

Global food prices are expected to decline for a second year in 2025. This drop is mainly due to falling rice prices. Abundant global supplies and relaxed export restrictions are affecting the market.

The World Bank's latest Commodity Markets Outlook predicts a 7% decrease in its food price index. Each of the three main categories—grains, oils and meals, and other food items—is expected to decline. Grain prices will likely see the largest drop of 11%. This is largely due to a projected 29% fall in rice prices.

India accounts for about 40% of global rice exports. It is expected to increase output by 5% in the 2024-25 season. Globally, rice production is forecasted to rise by 2%. Despite short-term weakness, rice prices should remain stable in 2026. Supply and demand are projected to grow together.

Wheat prices may also trend downward through 2026. Concerns about trade-related demand contribute to this trend. However, tight supply conditions could cushion the decline. Global wheat output is near record levels but may fall slightly below consumption.

Maize prices are expected to ease by 2% in both 2025 and 2026. Weaker crude oil prices will dampen ethanol demand. Growing U.S.-China trade tariffs may also suppress demand for maize. Additionally, maize’s price advantage over wheat and soybeans could encourage more cultivation.

Despite these factors, price declines might be limited by low stock levels. These stocks are set to reach their lowest point in over a decade.