The benchmark for world food commodity prices declined in December compared to the previous month, with the sharpest drop in international sugar quotations, the Food and Agriculture Organization of the United Nations (FAO) reported Friday.
The FAO Cereal Price Index increased 1.5 percent from November, as wheat, maize, rice, and barley prices all rose, partly reflecting logistical disruptions that hindered shipments from major exporting countries. For the year as a whole, the index was 15.4 percent below the 2022 average, reflecting well supplied global markets, although FAO’s All Rice Price Index (part of the FAO Cereal Price Index) registered a 21 percent increase, largely owing to concerns about the impact of El Niño on rice production and in the aftermath of export restrictions imposed by India.
The monthly increase was led by higher price quotations for butter and cheese
The FAO Vegetable Oil Price Index by contrast, declined by 1.4 percent from November, reflecting subdued purchases of palm, soy, rapeseed, and sunflower seed oil, with soy oil in particular impacted by a slowdown in demand from the biodiesel sector as well as improving weather conditions in major growing areas of Brazil. For 2023 as a whole, this index was 32.7 percent below the previous year’s level.
The FAO Sugar Price Index declined 16.6 percent from November, hitting a nine-month low although still up 14. 9 percent from December 2022. The plunge in sugar quotations was mainly driven by the strong pace of production in Brazil, along with reduced use of sugarcane for ethanol production in India.
Bucking the trend, the FAO Dairy Price Index increased by 1.6 percent from November, although still standing 16.1 percent below its December 2022 value. The monthly increase was led by higher price quotations for butter and cheese, underpinned by strong internal sales in Western Europe ahead of the holiday season. At the same time, strong global import demand led international whole milk powders to rise.
Source: Food and Agriculture Organization (FAO)
