Global food prices eases in Dec, lowest since 2021

Global food price index decreased in December against November owing to drop in sugar prices, data from the Food and Agricultural Organisation showed.

The United Nations index tracking raw commodity costs of food showed that for the full year of 2024, food prices hit 122 points—their lowest level since 2021.

On a year-on-year basis, the 2024 food price index was down 2.1 percent from the average value in 2023 (125 points).

The report revealed that average meat prices increased from 107.5 points in 2021 to 117.2 points in 2024, indicating a 9 percent price surge in the period.

According to the report, the increase was primarily driven by higher bovine meat prices, resulting from strong global demand coupled with production constraints due to routine end-of-year maintenance shutdowns at processing plants in major exporting countries.

“In 2024 as a whole, the FAO meat price index averaged 117.2 points, up 3.1 points from 2023, driven by robust import demand from key meat-importing countries, amid slower global production growth,” the report said.

For dairy, the report showed that dairy prices increased 8 percent to 130 points in 2024 from 120 points in 2021.

The report noted that the increase was mainly attributed to a sharp surge in butter prices, on the back of a high global demand and constrained exportable supplies, resulting from erratic weather patterns that negatively impacted production.

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Also, in the period under review, cereal prices declined to 114 points in 2024 down 13 percent from 131 points in 2021. This was underpinned by lower wheat and coarse grain prices, and marking a second annual decline from the 2022 record level (150 points).

Similarly, the FAO All Rice Price Index averaged 133.1 points, up 0.8 percent from 2023 and representing a 16-year nominal high.

“Indica quotations underpinned this annual increase, as strong import demand from some countries in Asia and reduced competition among exporters kept them elevated during the first nine months of 2024,” the FAO noted.

The prices for vegetable oil declined 16 percent in the review period to 138.2 points in 2024 from 165 points in 2021. This was due to tightening global supplies.

The report said in December, international palm oil quotations on average increased by 2.0 percent from November, largely driven by protracted tight supplies in leading producing countries in Southeast Asia.

However, world soyoil prices fell moderately, underpinned by prospects of ample global supplies and somewhat weaker demand in the United States.

In 2024, sugar prices averaged 126 points, up 15 percent from 109.3 points in 2021.

But on a year-on-year basis, its prices declined 13 percent on the back of record-high exports from Brazil during the year and a positive global supply outlook for the 2024/25 season.

In addition, improving prospects for the sugarcane crops to be harvested from April 2025 in Brazil and the ongoing crushing season in India and Thailand, where mills are fully operational, also contributed to the decline in world sugar prices year-on-year.