December global food price index drops 10% in one year

…ease global food inflation concern

World food commodity prices dropped 10.1 percent in December 2023 from a year earlier, the Food and Agriculture Organisation of the United Nations (FAO) reported Friday.

Values in December 2023 were also down from the previous month, further easing concerns over global food price inflation.

The food price index, which tracks changes in the international prices of a set of globally traded food commodities, averaged 118.5 points in December, down 1.5 percent from November (120.4 points).

For the whole of 2023, the index was 13.7 percent lower than the average value over the preceding year, with only the international sugar price index higher.

The sugar price index did, however, decline 16.6 percent in December last year from November.

“The plunge in sugar quotations was mainly driven by the strong pace of production in Brazil, along with reduced use of sugarcane for ethanol production in India,” FAO said in its report.

The cereal price index increased 1.5 percent in December from November, as wheat, maize, rice, and barley prices all rose, partly reflecting logistical disruptions that hindered shipments from major exporting countries.

For the year as a whole, cereal prices were 15.4 percent below their 2022 average, reflecting well-supplied global markets, although FAO’s All Rice Price Index (part of the FAO Cereal Price Index) registered a 21 percent increase, owing to concerns about the impact of El Niño on rice production and in the aftermath of export restrictions imposed by India.

The largest price falls were in vegetable oils, with the price index plunging 1.4 percent in December from November and a significant 32.7 percent drop for the year as a whole.

The meat price index dipped 1.0 percent in December from November and was down 1.8 percent year-on-year, while the December dairy price index rose 1.6 percent month-on-month, but was down 16.1 percent from a year earlier.

Bucking the trend, the dairy price index increased by 1.6 percent from November, although 16.1 percent below its December 2022 value.

“The monthly increase was led by higher price quotations for butter and cheese, underpinned by strong internal sales in Western Europe ahead of the holiday season.

At the same time, strong global import demand led international whole milk powders to rise,” the UN food agency said.