World Food Prices Dip by 1.9% in December 2022

Gilbert Ekugbe

The Food and Agriculture Organisation (FAO) food price index has revealed that world food prices dipped in December 2022 by 1.9 per cent from the previous month.

The food price index also averaged 132.4 points in December, 1.0 per cent below its value a year earlier, but however stated that for 2022 as a whole, the index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 143.7 points, 14.3 per cent higher than the average value over 2021.

The FAO Chief Economist, Maximo Torero, 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.”

The report added that vegetable oil’s world quotations led the decrease, with the FAO Vegetable Oil Price Index going down by 6.7 per cent from November to reach its lowest level since February 2021.

Torero added that international quotations for palm, soy, rapeseed and sunflower seed oils all declined in December due to subdued global import demand and prospects of seasonally rising soy oil production in South America as well as declining crude oil prices.

The FAO Cereal Price Index also decreased by 1.9 percent from November. Ongoing harvests in the southern hemisphere boosted wheat exportable supplies, while strong competition from Brazil drove down world maize prices. Conversely, international rice prices rose, buoyed by Asian buying and currency appreciation against the United States dollar for exporting countries.

The FAO Meat Price Index in December also dropped by 1.2 percent from November, with lower world prices of bovine and poultry meats outweighing higher pig and ovine meat prices.

International bovine meat prices were impacted by lackluster global demand for medium-term supplies, while more-than-adequate export supplies pushed down poultry meat prices. Pig meat prices rose on the back of strong internal holiday demand, especially in Europe,

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.