Business Maverick

COST OF LIVING

International food price index registers a small decline in December, but remains close to record highs

(Photo: Gallo Images / Lefty Shivambu)

The cost of food internationally remains extremely high, a boon for farmers, but a concern for governments and a heavy burden on the poor.

The international Food and Agriculture Organization (FAO) Food Price Index (FFPI) released on Thursday showed a small 0.9% decline in December to 133.7 points. But the overall index is up 25.1 points, or 23%, from the levels registered in December 2020.  

The FFPI, a global agency that tracks the price of food around the world, registered four consecutive monthly gains before prices decreased in December 2021, reaching their highest level since 2011 with 131.9 points. The dairy price index was the only subindex that increased, with an average 128.2 points in December, up 2.3 points from November 2020. 

“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,” the FFPI said.  

The cereal, vegetable and oil, meat and sugar price indexes experienced declines ranging from 0.9 points to 16.5 points. 

“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,” the FFPI statement read.  

The vegetable and oil price index decline was driven by weakening palm and sunflower oil prices, as well as unchanged soy and rapeseed oil values. 

“International palm oil prices fell in December, primarily reflecting subdued global import demand amid concerns over the impact of rising Covid-19 cases. 

“Meanwhile, 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 meat price index decreased due to declining poultry and pork prices for the sixth consecutive month because of a decline in Chinese imports.  

“The December [sugar] 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 statement elaborated. DM/BM

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