Food & Climate
Although the impact of US President Donald Trump’s decisions was not clearly evident in the March World Food Price Index, and despite its stability, there are some indications of the emergence of the Trump Specter, and that the current US president will add to the impact of climate change and supply and demand factors on the index in the coming months.
The Food and Agriculture Organization of the United Nations (FAO) indicated that the meat price index rose by 0.9% monthly and 2.7% annually, due to higher pork prices in Europe after Germany regained its foot-and-mouth disease-free status, and the euro’s appreciation against the US dollar, according to a statement that “Food & Climate” platform received.
On March 7, the euro rose by 0.8% to $1.0871, reaching a four-month high, following a nearly 5% rise in the first week of last month. Trading volume for euro-dollar options also reached a record high. The euro was on track for its best weekly performance in 16 years this week after Germany’s historic pledge to increase defense and infrastructure spending, a decision that came in response to Trump’s threats to impose tariffs on Europe and others.
The German parliament approved allocating €100 billion to modernize the military, in addition to €500 billion for infrastructure and climate projects, according to “BBC”.
Berlin was not alone in this trend, as Europe began preparing for massive increases in military and defense spending, especially after Trump’s rapprochement with Russian President Vladimir Putin.
Cereal Prices
The FAO reported on Friday, April 4, 2025, that its World Food Price Index, a benchmark for global food commodity prices, remained largely stable in March compared to its revised value in February, as lower global cereal and sugar prices offset a significant increase in vegetable oil prices. The World Food Price Index, which tracks monthly changes in international prices of a basket of globally traded food commodities, averaged 127.1 points in March, up 6.9% from a year earlier but still 20.7% below its peak in March 2022.
The FAO Cereal Price Index fell 2.6% in March compared to February and 1.1% from March 2024. International wheat prices fell as concerns about crop conditions in some major Northern Hemisphere exporting countries eased, although currency movements mitigated the decline.
International maize prices also declined compared to February, as did those of sorghum and barley. The FAO Rice Price Index fell 1.7% amid weak import demand and ample exportable supplies. In contrast, the Vegetable Oil Price Index rose 3.7% compared to February, recording an average increase of 23.9% compared to its level a year earlier. Prices for palm, soy, rapeseed, and sunflower oils rose, driven by strong global import demand.
Trump, Rain, and Avian Flu
While Donald Trump’s influence was only slightly felt in the March World Food Price Index, primarily through meat prices, which rose due to the strength of the euro against the dollar, FAO data revealed a clear impact of Brazil’s rains on sugar prices, as well as a residual effect of avian influenza outbreaks in some countries.
Global poultry meat prices remained largely stable in March, despite the ongoing challenges posed by widespread avian influenza outbreaks in some major producing countries.
The FAO Dairy Price Index remained unchanged from February, as lower global cheese prices offset higher butter and milk powder prices. The FAO Sugar Price Index fell 1.6% in March, driven mainly by signs of weak global demand. Recent heavy rains in key sugarcane-growing regions in southern Brazil contributed to the decline, while deteriorating production prospects in India and persistent concerns about the overall crop outlook in Brazil limited the price decline.