Food and Agriculture Organization's (FAO) Food Price Index continued to drop in December, however, it rose substantially on a yearly basis. The FAO food price index, which tracks international prices of the most globally traded food commodities, averaged 143.7 points in 2022, up 14.3% from 2021, and the highest since records started in 1990, the agency said on January 6, 2023.
According to the comment published by FAO on Jan 6, a surge in the cost of most food commodities last year, as the disruption caused by Russia's invasion of Ukraine raised concerns of shortages, sent the U.N. food agency's average price index to the highest level on record.
The index had already gained 28% in 2021 from the previous year as the world economy recovered from the impact of the pandemic. Food prices surged after Russia's invasion of Ukraine in February last year on fears of disruptions to Black Sea trade. They have pared some of their gains since, in part because of a U.N.-backed grain export channel from Ukraine and the prospect of improved supplies in producing countries.
The FAO Food Price Index averaged 132.4 points in December 2022, down 2.6 points (1.9 percent) from November, marking the ninth consecutive monthly decline and standing 1.3 points (1.0 percent) below its value a year ago.
For 2022 as a whole, however, the FFPI averaged 143.7 points, up from 2021 by as much as 18 points, or 14.3 percent.
In December the benchmark index fell for the ninth consecutive month to 132.4 points, compared with a revised 135.00 points for November. The November figure was previously given as 135.7 points. "Calmer food commodity prices are welcome after two very volatile years," FAO Chief Economist Maximo Torero 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, but mitigated by slight increases in those of sugar and dairy, the FAO said.
Still over the whole of 2022, four of the FAO's five food sub-indexes - cereals, meat, dairy and vegetable oils - had reached record highs, while the fifth one, sugar, was at a 10-year high.
The FAO Cereal Price Index rose 17.9% in 2022 due to factors including significant market disruptions, higher energy and input costs, adverse weather and continued strong global food demand, the FAO said.
Some complementary data
The FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.
Sources: reuters.com, fao.org
