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Global food prices dip in December, remain 28% higher than 2020

Global food prices fell slightly in December as vegetable oils and sugar declined significantly from elevated levels, according to the latest data from the UN’s Food and Agriculture Organization (FAO).

Judie Bizzozero

January 11, 2022

4 Min Read
Food commodity prices

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 133.7 points in December, down 0.9% from November but still 25.1% higher than its level one year ago. For 2021 as whole, the FFPI averaged 125.7 points, as much 28.1% above the previous year with all sub-indices averaging sharply higher than in the previous year.

“While normally high prices are expected to give way to increased production, the high cost of inputs, ongoing global pandemic and ever more uncertain climatic conditions leave little room for optimism about a return to more stable market conditions even in 2022, ” said FAO Senior Economist Abdolreza Abbassian.

The Cereal Price Index averaged 140.5 points in December, down 0.6% from November. Wheat export prices fell in December, amid improved supplies following harvests in the southern hemisphere and slowing demand. However, maize prices were firmer, underpinned by strong demand and concerns over persistent dryness in Brazil. While sorghum prices also rose, partly influenced by maize markets, barley quotations eased slightly. International rice prices also softened in December, as demand relapsed, and currencies weakened against the U.S. dollar in various major suppliers. On an annual basis, the FAO Cereal Price Index averaged 131.2 points in 2021, up 27.2% from 2020 and the highest annual average registered since 2012. In 2021, maize and wheat prices were 44.1% and 31.3% higher than their respective 2020 averages, mostly on strong demand and tighter supplies, especially among major wheat exporters. Rice was the sole major cereal to register a decline in prices in 2021, with quotations falling on average 4% below 2020 levels. The weakness reflected ample exportable availabilities of rice, which heightened competition among suppliers and led them to seek to counter the impact of high freight costs and container shortages on demand by lowering prices.

The Vegetable Oil Price Index averaged 178.5 points in December, dropping 3.3% from recent record highs. The decline was driven by weakening palm and sunflower oil prices, while soy and rapeseed oil values remained virtually unchanged month-on-month. International palm oil prices fell in December, primarily reflecting subdued global import demand amid concerns over the impact of rising COVID-19 cases. International sunflower oil quotations were also weaker, reflecting demand rationing. By contrast, world soy and rapeseed oil prices maintained their strength, largely underpinned by, respectively, firm import demand primarily from India and protracted global supply tightness. The Vegetable Oil Price Index averaged 164.8 points in 2021, up 65.8% from 2020 and marking an all-time annual high.

The Dairy Price Index averaged 128.2 points in December, up 1.8% from November and 17.4% above its December 2020 value. In December, international quotations for butter and milk powders continued to increase, underpinned by high global import demand, coupled with tight export supplies, resulting from lower milk production in Western Europe and Oceania. Despite the low milk output, cheese production in Western Europe increased as producers preferred cheese over alternative dairy products, causing a marginal decline in cheese prices. In 2021, the FAO Dairy Price Index averaged 119.0 points, up 16.9% from 2020, reflecting sustained import demand throughout the year, especially from Asia, and tight exportable supplies from the leading producing regions.

The Sugar Price Index averaged 116.4 points in December, down 3.1% from November and a five-month low. The December decline reflected concerns over the impact of the Omicron COVID-19 variant on global demand for sugar following the resumption of containment measures in many regions. The weakening of the Brazilian Real against the U.S. dollar and lower ethanol prices also contributed to lowering world sugar prices in December. T Sugar Price Index averaged 109.3 points in 2021, up 37.5% from 2020 and the highest since 2016.

The Meat Price Index averaged 111.3 points in December, marginally changed from November and 17.4% above its year-earlier value. In December, poultry prices fell, primarily weighed by increased global exportable supplies, while ovine prices declined on increased supplies from Oceania. Meanwhile, pig meat prices fell for the sixth consecutive month, though slightly, as the continued downward pressure stemming from the decline in Chinese imports was compensated by increased pre-Christmas sales in major producing countries.  In 2021, the FAO Meat Price Index averaged 107.6 points, up 12.7% from 2020. Across the different categories, ovine meat registered the sharpest increase in prices, followed by bovine and poultry meats, while pig meat prices fell marginally.

About the Author(s)

Judie Bizzozero

Content Director, Informa Markets Health & Nutrition

Judie Bizzozero oversees food and beverage content strategy and development for the Health & Nutrition group at Informa Markets (which acquired VIRGO in 2014), including the Food & Beverage Insider, Natural Products Insider and SupplySide/Food ingredients North America brands. She reports on market trends, science-based ingredients, and challenges and solutions in the development of healthy foods and beverages. Bizzozero graduated from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University in 1987 with a bachelor’s degree in journalism.

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