World food prices declined in December
World food prices declined slightly in December due to a marked drop in international vegetable oil and sugar prices from their previous high levels, the Food and Agriculture Organization of the United Nations (FAO) said today.
The FAO food price index averaged 133.7 points in December, down 0.9% from November but still 23.1% higher than in December 2020. The index reflects the monthly change in international prices of the most traded food products. Only the sub-index relating to dairy products recorded a monthly rise in December.
For 2021 as a whole, calculating full-year averages, the FAO food price index averaged 125.7 points, up 28.1 % from the previous year.
“While high prices are normally expected to lead to increased production, high input costs, the current global pandemic and conditions of increasing climatic uncertainty leave little room for optimism that more stable trading conditions will return even in 2022,” said Mr. Abdolreza Abbassian, FAO Senior Economist.
FAO’s cereal price index declined by 0.6% from November, as lower wheat export quotations due to increased supplies following the southern hemisphere harvests more than offset higher maize prices, supported by solid demand and concerns over persistent dryness in Brazil.
For the full year, however, the FAO cereal price index reached its highest annual level since 2012 and an average 27.2% higher than in 2020, up 44.1% for maize and 31.3% for wheat, but down 4.0% for rice.
The FAO vegetable oil price index declined by 3.3% in December, with weaker quotations for palm and sunflower oils due to weak global import demand, which may be linked to concerns about the effects of the rising number of cases of coronavirus disease (COVID-19). However, looking at 2021 as a whole, the FAO vegetable oil price index reached an all-time high, up 65.8% from 2020.
The FAO sugar price index declined by 3.1 % since November, reaching the lowest level in five months, following concerns about the possible effects of the omicron variant of COVID-19 on global demand, as well as the weakening of the Brazilian real and lower ethanol prices. Nevertheless, looking at 2021 as a whole, the FAO sugar price index was up 29.8% from the previous year and reached its highest level since 2016.
While the FAO meat price index remained broadly stable in December, for 2021 as a whole, its value was 12.7 % higher than in 2020.
The FAO dairy price index was the only sub-index to increase in December, up 1.8 % from the previous month, due to higher international quotations for butter and milk powders due to reduced milk production in Western Europe and Oceania. On the other hand, cheese prices decreased slightly due to the preference of Western European dairy producers. As a result, in 2021, the FAO dairy price index averaged 16.9% higher than in 2020.