Food: Global Prices at the End of 2018

In December, the FAO food price index fell 4% compared to the same month in 2017, explained by the decline in prices of meat, dairy products, vegetable oils and sugar.

Thursday, January 10, 2019

From FAO's monthly report:

The FAO Food Price Index* (FFPI) averaged 161.7 points in December 2018, nearly unchanged from its November value as lower dairy and sugar quotations were largely offset by firmer cereal prices and somewhat higher prices of meat and oils. For the whole of 2018, the FFPI averaged 168.4 points, down 3.5 percent from 2017 and almost 27 percent below the highest level of 230 points reached in 2011. Sugar values dropped the most in 2018, with also vegetable oil, meat and dairy prices registering year-on-year decreases. However, international prices of all major cereals rose in 2018.

The FAO Cereal Price Index averaged 167.1 points in December, 3.0 points (1.8 percent) higher than in November and 9.6 percent above December 2017. Wheat prices were up slightly in December, mostly supported by harvesting concerns in Argentina due to untimely rains and tightening export supplies in the Russian Federation. However, strong competition for exports limited the rise in prices. International maize prices also rose in December, amid firm global demand coupled with weather concerns in the southern hemisphere. By contrast, international rice prices subsided for the sixth successive month, pressured further by a quiet pace of trade. Over the whole of 2018, the FAO Cereal Price Index averaged just over 165 points, some 9.0 percent higher than in 2017 but still 31 percent below its peak reached in 2011. Falling world output of wheat and maize contributed to the increase in prices during 2018, although overall global supplies of all the major cereals remained more than sufficient, leaving inventories still at high levels.  

The FAO Vegetable Oil Price Index averaged 125.8 points in December, posting a marginal increase of 0.5 points (0.4 percent) from the previous month and marking the first rebound after ten consecutive falls. The slight recovery was driven by higher palm oil prices, which reflect both rising domestic demand in major producing countries and firmer global import demand. By contrast, international soy and rapeseed oil prices continued to drift downward on account, respectively, of ample supplies in the US and weak demand in the EU. Falling mineral oil prices also weighed on vegetable oil values. For the year as a whole, the FAO Vegetable Oil Price Index averaged 144 points, down 15 percent from 2017 and reaching the lowest level since 2007, with palm oil prices registering the largest decline amid weak global demand accompanied by an accumulation of stocks in major producing countries.

The FAO Meat Price Index* averaged 163.6 points in December, 1.3 points (0.8 percent) higher than its slightly revised value for November. While poultry and bovine meat prices changed only little in December, international price quotations for ovine meat fell slightly, mostly as a result of increased export supplies from Oceania. By contrast, pigmeat prices partially recovered, supported by strong global import demand, especially from Brazil. In 2018, the Index averaged 166.4 points, down 2.2 percent from 2017. The year-on-year decline reflected drops in the prices of pig and poultry meats, which more than offset higher ovine meat quotations. In bovine meat markets, prices remained close to their 2017 levels.

The FAO Dairy Price Index averaged 170 points in December, down 5.9 points (3.3 percent) from November, marking the seventh successive month of decrease. In December, international price quotations for butter, cheese and Whole Milk Powder (WMP) declined, underpinned by increased availability of export supplies, especially from New Zealand. However, Skim Milk Powder (SMP) prices increased marginally on stronger world  import demand. For the whole of 2018, the Index averaged 192.9 points, down 4.6 percent from 2017, as a result of declines in price quotations for all dairy products included in the Index during the second half of the year.

The FAO Sugar Price Index averaged 179.6 points in December, down 3.6 points (1.9 percent) from November. International sugar prices fell under renewed downward pressure, in part because of reportedly faster growth in sugar production in India in recent months. Falling international prices of crude oil also contributed to the slide in sugar quotations, as lower energy prices tend to reduce the use of sugarcane to produce ethanol, resulting in more supplies  for the production of sugar, notably in Brazil, the world’s largest sugar producer. Overall for 2018, the Index fell by almost 22 percent year-on-year, underpinned by ample world production and accumulating inventories.

More on this topic

Food: Global Prices up to February 2018

March 2018

In February, the FAO food price index fell by almost 3% in year-on-year terms, due to a drop in prices of sugar and vegetable oils.

From the monthly report on the FAO food price index: 

The FAO food price index stood in February 2018 at an average of 170.8 points, that is to say, 1.1% (or 1.8 points) more than in January, although it is still 2.7% less than its value in the same period last year. Higher international prices for dairy products and cereals contributed to the inter-monthly rise in the value of the index, while prices for sugar and vegetable oils declined and meat prices remained stable. 

Food: Global Prices Up 8% in 2017

January 2018

The FAO food price index closed the year with an increase of 8% compared to 2016, the highest annual average since 2014, although it is still 24% below the maximum levels reached in 2011.

From the monthly report on the FAO food price index:

The FAO Food Price Index* (FFPI) averaged 169.8 points in December 2017, down 5.8 points (3.3 percent) from November with the steepest declines registered in the prices of dairy, vegetable oils and sugar while those of cereals and meat also fell but only slightly. For the whole of 2017, the FFPI averaged 174.6 points, up 8.2 percent from 2016 and representing the highest annual average since 2014 although still 24 percent below the 2011 high of almost 230 points. While sugar values plummeted in 2017, dairy and meat prices registered sharp year-on-year increases and those of cereals and oils rose too, albeit more modestly.

Global Food Prices - December 2017

December 2017

World food prices fell slightly in November, as the decline in prices of dairy products offset a sharp increase in the prices of sugar and vegetable oils.

From a statement by the World Food Organization (FAO):

7 December 2017, Rome - Global food prices declined marginally in November, as lower dairy prices offset a sharp increase in sugar and vegetable oil quotations, according to the latest FAO Food Price Index issued today.

Global Food Prices up to December 2016

January 2017

The FAO food price index remained unchanged in comparison to November, with substantial increases in the prices of vegetable oils and dairy products which more than offset a fall in sugar and meat.

From a statement issued by the World Food Organization:

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