Global Food Prices Decline 1.5%, FAO Reports 10.1% Yearly Drop

In December, global food prices experienced a 1.5 per cent drop compared to the previous month, marking a 10.1 per cent decrease compared to the same period a year earlier, as stated by the United Nations Food and Agriculture Organization (FAO) on Friday.

According to the FAO report, while dairy products and grains saw price increases, these gains were offset by reduced prices in sugar, vegetable oils, and meat.

Grains and cereals, the index’s largest component, observed a 1.5 per cent increase in prices in December. Despite this rise, they concluded the year 16.6 per cent below December 2022 levels, as per FAO data.

Dairy prices climbed 1.6 per cent in December but remained down by 16.1 per cent for the entire year. The FAO attributed the monthly increase to heightened demand for butter, whole milk powder, and cheese.

Contrarily, all other sub-indexes experienced declines during the month.

Sugar prices saw the most significant drop, plummeting by 16.6 per cent in December to their lowest point in nine months due to robust production levels in Brazil. However, despite this sharp decrease, the sugar sub-index still closed the year with prices 14.9 per cent higher than in December 2022.

Vegetable oil prices decreased by 1.4 per cent in December, contributing to a 32.7 per cent decline for the entire 2023. This annual reduction was driven by price decreases in palm, rapeseed, soy, and sunflower seed oils, largely due to weakened demand.

Meat prices also experienced a decline, dropping by 1.0 per cent in December and concluding the year with a 1.8 per cent decrease. The decline at the end of the year was primarily due to decreased demand for pig meat in Asia, which offset a slight uptick in demand for ovine meat.

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