FAO Reports Decline in Global Food Prices Due to Falling Sugar Costs
Forex - The Food and Agriculture Organization (FAO) reported that the reference for global food commodity prices declined in December compared to the previous month, primarily driven by a decrease in international sugar prices.
According to the FAO, the FAO Food Price Index, which tracks monthly changes in international prices of a range of globally traded food commodities, averaged 127.0 points in December, marking a 0.5% decrease from November, but a 6.7% increase compared to December 2023.
For the entirety of 2024, the index recorded an average of 122.0 points, which is 2.1% lower than the average value in 2023, with significant declines in price offers for grains and sugar compensated by smaller yet non-negligible increases in the prices of vegetable oils, dairy products, and meat.
In December, the FAO Cereal Price Index remained relatively unchanged from November as marginal increases in corn price offers offset declines in wheat prices, and it was 9.3% lower than the same period the previous year. For 2024, the FAO Cereal Price Index averaged 113.5 points, down 13.3% from 2023, marking the second annual decrease from the record level in 2022.
The FAO All Rice Price Index increased by 0.8% from the 2023 average, reaching a nominal 16-year high.
In December, the FAO Vegetable Oil Price Index decreased by 0.5% from November but was still 33.5% higher than the same period last year. For 2024, the FAO Vegetable Oil Price Index was on average 9.4% higher than in 2023 due to tightening global supply.
Contrary to other sub-indices, the FAO Meat Price Index ended a three-month declining trend, increasing by 0.4% in December compared to November and standing 7.1% above the December 2023 level. Overall, in 2024, the FAO Meat Price Index was 2.7% above the average for 2023, with higher offers for beef, sheep, and poultry compensating for falling international prices for pork.
The FAO Dairy Price Index declined after seven months of increases, falling 0.7% since November, but remained 17.0% above the December 2023 level. Overall, in 2024, the FAO Dairy Price Index was on average 4.7% higher than in 2023, primarily due to rising butter prices.
The FAO Sugar Price Index led a monthly decline with a 5.1% drop since November, driven by improved sugar cane crop expectations in major producing countries, and remained 10.6% below the December 2023 level. For the entirety of 2024, the FAO Sugar Price Index was, on average, 13.2% lower than in 2023.