This blog post is part of a special series based on the October 2023 Commodity Markets Outlook, a flagship report published by the World Bank. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.
The World Bank’s food price index weakened throughout 2023, averaging for the year as a whole 9 percent lower than 2022. The decline, reflecting robust harvests, unfolded despite the non-renewal of the Black Sea Grain Initiative, some trade restrictions, and the ongoing El Niño. Global food prices are expected to ease further in 2024 and 2025 (2 and 3 percent, respectively) as the global supply outlook continues to improve. Despite recent declines, inflation-adjusted food prices in 2023 remain at levels comparable to the food price spikes of 2007-08 and 2011-12. Risks to the outlook (discussed in this blog) are balanced and reflect further El Niño developments, macroeconomic conditions, and trade restrictions.
Grain supplies rebounding. Global grain supplies are expected to rebound by 42 million metric tons (mmt) (or 1 percent) in 2023-24, reversing the previous year's decline—this increase is remarkably similar to the two-decade average growth of 46 mmt. Global maize exports are also poised for a significant rebound, with an estimated increase of over 11 percent, fueled by robust production in Argentina, the European Union, and the United States. Conversely, wheat exports are projected to decline by 6 percent, amid lower exports from Australia (-42 percent, in response to El Niño), Canada (-8 percent), the United States (-4 percent), and Ukraine (-27 percent, following the non-renewal of the Black Sea deal). Global rice exports are set to drop nearly 4 percent, as increased exports from China, Pakistan, and the United States are unlikely to balance declines from the top three rice exporters—India, Thailand, and Viet Nam.
Oilseed supplies to increase. Global oilseed supply for 2023-24 is expected to increase by 75 million metric tons (or 4 percent), nearly double the average annual growth during 1990-2022. Global output of soybeans (the largest oilseed crop) in the current 2023-24 season is expected to surpass the last season’s record output, largely due to Brazil’s robust output. Argentina’s soybean production is expected to rebound by more than 90 percent from the drought-affected levels of the previous year.
Stock-to-use ratios stabilized. The stock-to-use ratio for the food aggregate, a rough indicator of supply relative to projected demand, is projected to hold steady in 2023-24. However, it will be slightly higher for maize and somewhat lower for wheat and rice. Although the ratios have moderated since their recent peaks, their current levels, which are considerably higher than their 2006-08 levels, are consistent with adequate supply conditions.
Domestic food price inflation moderating. Global median year-on-year domestic food price inflation in 2023Q3 averaged above 8 percent, down from its peak of nearly 14 percent in November 2022. By November 2023, the median food price inflation had fallen to 6 percent. This moderation partly reflects the declining global prices of many agricultural commodities. Despite its recent drop, food price inflation is still high in many parts of the world, particularly in low-income and lower-middle-income countries where the median food price inflation was 9.5 and 8 percent, respectively, in November 2023. By comparison, the median food price inflation in upper-middle-income and high-income countries during the same month was 5 percent and 5.7 percent, respectively.
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