The Food Price Index, a measure of the monthly change in a basket of the main food commodities that feed the world, fell 1.8 points or 1.5% in December to 118.5 points from 120.3 in November. This brought the index down by 13.3 points or 10.1% over the course of 2023. 

Read more here: FAO Food Price Index | Food and Agriculture Organization of the United Nations 

“For 2023 as a whole, the index recorded 124.0 points, 19.7 points (13.7%) lower than the average value in 2022,” the UN’s Food and Agriculture Organization (FAO) said. 

This is welcome relief, as the average for 2022 was a record high of 143.7 points, 18 points higher than the 2021 average of 125.7, a state of affairs driven largely by Russia’s invasion of Ukraine, a major grain producer.

Read more in Daily Maverick: Food prices averaged a record high in 2022, but have fallen back to their end-of-2021 levels — FAO

A number of factors have contributed to slowing food inflation, not least good grain harvests which eased the pain of Russia’s war in Ukraine. 

“For the year as a whole, the FAO Cereal Price Index stood at 130.9 points in 2023, down 23.8 points (15.4%) from the 2022 record annual average, reflecting well supplied global markets,” the FAO said. 

This in turn will help to cool the embers of global inflation, underpinning hopes that interest rates have peaked and central banks can begin loosening monetary policy in 2024. 

Still, the prices of key caloric staples such as rice remained red hot. 

“According to the rice index, international rice prices registered a 21% annual increase in 2023, largely owing to concerns about the impact of El Niño on rice production and in the aftermath of export restrictions imposed by India,” the FAO said.  

For South Africans, food inflation has also been slowing, though it ticked up in November from October, the latest month for which the data is available. 

But South African food inflation was slower on an annual basis in November 2023 at 9.0% than it was in November 2022 when it was fetching 12.8%.  

Read more in Daily Maverick: South Africa’s annual inflation slows in November, retail trade sales dip in October

On the domestic and global fronts, the El Niño weather pattern and the disruption to global trade through the Red Sea triggered by attacks by Houthi rebels in response to Israel’s bombardment of Gaza could bring renewed pressure to food prices and inflation overall.

The Suez Canal is a key transit point for grain shipments and the attacks are forcing bulk carriers to re-route thousands of kilometres around the Cape of Good Hope, adding significantly to shipping costs and causing delays which will translate into shortages. 

Meanwhile, El Niño has cast a cloud of uncertainty on global grain and other food markets.  El Niño typically heralds drought in southern Africa but the current event is seen fading rapidly this year. 

South Africa’s long-range weather forecast is for a relatively dry summer across much of the country, but agricultural analysts have noted that moisture levels remain decent and good harvests for the staple maize crop are still expected. 

Forecasts fluctuate and El Niño could remain in place longer than currently expected or still have a big impact. 

At least for now, food inflation is on the wane. DM