Global food prices hit record high in 2022

Despite food prices declining for the ninth consecutive month in December, average annual global commodity prices hit a record high in 2022, the UN’s Food and Agricultural Organisation said last Friday.

The FAO’s yearly food price index which tracks global commodities, averaged 143.7 points in 2022, up 18 points or 14.3 percent from the 2021 average, the highest since FAO started taking records.

The decline in the index in December was driven by a steep drop in the international price of vegetable oils, together with some declines in cereal and meat prices, but mitigated by slight increases in those of sugar and dairy, the FAO said.

On a month-on-month basis, it averaged 132.4 points last month compared with a revised 135.00 points for November.

“Calmer food commodity prices are welcome after two very volatile years,” said Maximo Torero, chief economist at FAO.

“It is important to remain vigilant and keep a strong focus on mitigating global food insecurity given that world food prices remain at elevated levels, with many staples near record highs, and with prices of rice increasing, and still many risks associated with future supplies,” Torero added.

Food prices surged after Russia’s invasion of Ukraine in February last year. The war, which is now in its eleventh month, disrupted the global supply chain and cut off shipments from the Black Sea region that accounts for 30 percent of the major grain trade and at least 12 percent of food calories traded.

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The global fertiliser trade was disrupted and prices have continued to surge.

The FAO Cereal Price Index averaged 147.3 points in December, 4.8 percent above its December 2021 value. For 2022 as a whole, the FAO Cereal Price Index reached a new record high of 154.7 points, up 23.5 points (17.9 percent) from 2021. This surge owed to a host of factors, including significant market disruptions, increased uncertainties, higher energy and input costs, adverse weather in a few key suppliers, and continued strong global food demand.

World prices of maize and wheat reached new record highs in 2022, averaging, respectively, 24.8 and 15.6 percent higher than their 2021 averages, while rice export prices were on average 2.9 percent above their 2021 levels.

Marking a new record annual high, Vegetable Oil Price Index averaged 187.8 points, up 13.9 percent from 2021.

In 2022 as a whole, the FAO Meat Price Index averaged 118.9 points, up 11.2 points (10.4 percent) from 2021, marking the highest annual average registered since 1990, according to the report. Dairy Price Index also increased by 19.6 percent from 2021.

For 2022 as a whole, the FAO Sugar Price Index averaged 114.5 points, up 5.1 points (4.7 percent) from 2021 and reaching its highest annual average since 2012.