On January 6, Central European Time, the Food and Agriculture Organization of the United Nations issued a report stating that global food prices fell slightly in December 2021 due to the sharp drop in international vegetable oil and sugar prices, but they still hit a 10-year high last year.
The FAO global food prices index tracks the changes in the international prices of the most actively traded food commodities in the world on a monthly basis. The index for December 2021 averaged 133.7 points, a decrease of 0.9% month-on-month and an increase of 23.1% year-on-year. In 2021, the FAO global food prices index averaged 125.7 points, a sharp increase of 28.1% from the previous year. Data show that despite the weakening of wheat and rice prices in December 2021, cereal prices for the whole year still hit their highest levels since 2012.
FAO senior economist Abasiyan pointed out that due to high input costs, continued global epidemics, and more uncertain weather conditions, the prospects for restoring market stability in 2022 are still not optimistic.
On the 6th, FAO also released its monthly “Cereal Supply and Demand Bulletin”. It is estimated that the world’s cereal output in 2021 will be 2.791 billion tons, an increase of 0.7% compared with 2020, which is a new high. The report predicts that world cereal utilization in 2021 and 2022 will increase by 1.7% compared to the previous year, reaching 2.81 billion tons.
The data also showed that the food price index in December last year was 0.9% lower than that in November, but it was still 23.1% higher than in December 2020. Only the dairy product index has seen a monthly increase.
The FAO Food Price Index, which is published monthly, is a measure of changes in the international prices of the most actively traded food commodities in the world.
FAO Senior Economist Abdolreza Abbassian pointed out: “Although under normal circumstances, the increase in production will loosen high prices, but due to the high cost of inputs, the global epidemic continues In addition, climatic conditions are more uncertain, and even the prospect of restoring more stable market conditions in 2022 is still not optimistic.
Cereals: 44% higher than in 2020
The FAO Grain Price Index fell by 0.6% from November as the decline in wheat export quotations brought about by improved supply in the southern hemisphere after harvest, offset the increase in corn prices supported by strong demand and concerns about Brazil’s ongoing drought.
However, for the full year, the FAO Cereal Price Index reached its highest annual level since 2012, with an average increase of 27.2% over 2020, corn increased by 44.1%, wheat increased by 31.3%, but rice fell by 4.0%.
Vegetable oil: nearly 66% higher than in 2020
The vegetable oil price index fell 3.3% in December, and palm oil and sunflower oil quotations fell, reflecting weak global import demand, which may be related to concerns about the impact of the increase in new crown cases. Throughout 2021, the FAO Vegetable Oil Price Index hit a record high, an increase of 65.8% over 2020.
Sugar: nearly 30% higher than in 2020
The FAO Sugar Price Index fell 3.1% from November to a five-month low, reflecting concerns about the possible impact of the new crown Omi Keron variant on global demand, as well as the weakening of the Brazilian real and falling ethanol prices. For the entire year of 2021, the FAO Sugar Price Index increased by 29.8% from the previous year, reaching the highest level since 2016.
Meat: nearly 13% higher than in 2020
The meat price index was generally stable in December, but for the whole of 2021, the FAO meat price index was 12.7% higher than in 2020.
Dairy products: nearly 17% higher than in 2020
The FAO Dairy Price Index was the only sub-index that rose in December, up 1.8% from November, as milk production in Western Europe and Oceania declined, and international quotations for butter and milk powder rose accordingly. The price of cheese fell slightly, reflecting the preference of Western European dairy producers. In 2021, the FAO Dairy Price Index is 16.9% higher than in 2020 on average.