FAO: World food prices fell for ninth consecutive month in December

By Abubakar Yunus Abuja

The Food and Agricultural Organisation (FAO) of the United Nations says global food prices declined for the ninth consecutive month in December 2022 — but rose substantially on a yearly basis.

The UN agency made this known in its latest food price index released on Friday.

It said the food price index, which tracks international prices of the most globally traded food commodities, averaged 132.4 points in December, down by 1.9 percent from November, as well as 1 percent below its value last year.

It, however, said for 2022 as a whole, the index averaged 143.7 points in 2022, up by 14.3 percent from 2021.

FAO said the decline in the index in December was driven by a drop in the international price of vegetable oils, together with some declines in cereal and meat prices.

However, sugar and dairy prices rose during the period under review.

According to the report, the FAO dairy price index increased by 1.2 percent in December, following five months of consecutive declines.

“Higher international cheese prices, reflecting tightening market conditions, drove the monthly increase in the index, while international quotations for butter and milk powder declined,” FAO said.

It further explained that sugar prices rose mostly due to concerns over the impact of adverse weather conditions on crop yields in India and sugarcane crushing delays in Thailand and Australia.

“As noted, the FAO Food Price Index average over 2022 was notably higher than the previous year, which on top of large increases in 2021 catalysed significant strains and food security concerns for lower-income food-importing countries and the adoption, inspired by FAO, of a “food shock window” lending facility by the International Monetary Fund,” the organisation said.

“World prices of wheat and maize reached record highs over the year. The average value of the FAO vegetable oil price index for all of 2022 reached a new record high, while the FAO dairy price index and meat price index marked their highest full-year levels since 1990.”

Commenting on the development in a statement, Maximo Torero, FAO chief economist, said, “calmer food commodity prices are welcome after two very volatile years.”

“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.”