The United Nations Food and Agriculture Organization (FAO) has released data indicating a mixed trend in the prices of key food commodities during December. The FAO Food Price Index, a measure of monthly changes in international prices of a basket of food commodities, stood at an average of 118.5 points in December. This represents a decrease of 1.5% compared to November and a significant 10.1% drop from the same period in 2022.
Throughout 2023, the index showed a 13.7% decline compared to the average value of the preceding year. The only exception in this downward trend was the international sugar price index, which recorded an increase over the year.
The FAO Cereal Price Index, which includes wheat, maise, rice, and barley, saw a 1.5% increase in December. This rise was attributed to logistical issues that affected exports from key countries. However, the annual average for 2023 was 15.4% lower than in 2022, with the All Rice Price Index notably increasing by 21%. This was largely due to concerns about the potential effects of El Niño on rice production and India’s export restrictions.
Conversely, the FAO Vegetable Oil Index witnessed a 1.4% decline in December, influenced by lower demand for various oils including palm, soy, rapeseed, and sunflower seed oil. The decrease in soy oil demand was linked to a reduction in biodiesel sector activity and favourable weather conditions in Brazil. The yearly average for this index was 32.7% lower than in the previous year.
The FAO Sugar Price Index experienced a 16.6% fall from November, marking a nine-month low, yet it was 14.9% higher compared to December 2022. The decline was mainly due to increased sugar production in Brazil and a shift in India’s sugarcane usage away from ethanol production.
The FAO Meat Price Index showed a modest decrease of 1.0% from November, with a 1.8% reduction from December 2022. This was largely due to reduced import demand in Asia, especially for pig meat. Despite abundant supplies, there was a slowdown in regional demand for bovine and poultry meat, while ovine meat prices saw an increase in anticipation of the holiday season.
In contrast to these trends, the FAO Dairy Price Index recorded a 1.6% increase from November, although it remained 16.1% below its December 2022 level. This rise was driven by higher prices for butter and cheese, supported by strong domestic sales in Western Europe during the holiday period. Furthermore, a surge in global demand led to an increase in prices for international whole milk powders.
