Led by declines in cereals and fats and oil prices, global food prices fell 1.1% in December to their lowest levels since June 2012, according to new statistics released by the United Nation’s Food and Agriculture Organization (FAO) on Jan. 10.
The FAO Food Price Index, measuring the monthly change in international prices of a basket of 55 food commodities, averaged 209 points in December 2012, down 2 points (1.1%) from November. For 2012, the index averaged 212 points, 7% less than in 2011, with the sharpest declines registered by sugar (17.1%), dairy products (14.%) and oils (10.7%. The 2012 price falls were much more modest for cereals (2.4%) and meat (1.1%).
The Cereal Price Index averaged 250 points in December, down 6 points (2.3%) from November. In 2012, the index averaged 241, or 2.4% below 2011. After surging over the July to September 2012 period, on production uncertainties and tightening supplies, cereal export quotations dropped because of weaker demand for feed and industrial uses. In December, maize prices fell sharply, as large export supplies in South America relieved pressure from tight availabilities in the United States. Rice prices also dipped in December, on expectation of good harvests, but wheat values changed little under subdued trade activity.
The Dairy Price Index averaged 197 points in December, up .09% from November. In the last quarter of 2012, dairy prices stabilized, after having risen from mid-year lows. Overall, the dairy market remains well-balanced; however, it is increasingly susceptible to supply changes depending on pasture conditions—especially as southern-hemisphere producers assume an increasing role in supplying the world market—and on feed availability and affordability.
The Oils/Fats Price Index averaged 197 points in December, down 1.9% from November, the fourth consecutive month of decline and the lowest level since September 2010. The main reason for the fall in December is the continued build-up of large global inventories of palm oil—as abundant production in Southeast Asia coincided with a protracted weakness of import demand.
The decline in the index would have been even stronger without the prospect of both a tight global supply and demand situation for soybean oil during the next two to three months and lower than anticipated availabilities of sunflower seed oil.
The Meat Price Index averaged 176 points in December, down marginally from November. Quotes for all meat categories remained close to their November level, except pig meat, which fell by 2%. Overall, the meat sector has had to focus on productivity gains, as increased feed costs have not been associated with higher product prices.
The Sugar Price Index averaged 274 points in December, down marginally from November and its lowest value since August 2010. The expectation of a third consecutive increase in global production and large export availabilities in the 2012-13 marketing season, notably in Brazil, have put international prices under downward pressure for much of the second half of 2012.
The FAO Food Price Index, measuring the monthly change in international prices of a basket of 55 food commodities, averaged 209 points in December 2012, down 2 points (1.1%) from November. For 2012, the index averaged 212 points, 7% less than in 2011, with the sharpest declines registered by sugar (17.1%), dairy products (14.%) and oils (10.7%. The 2012 price falls were much more modest for cereals (2.4%) and meat (1.1%).
The Cereal Price Index averaged 250 points in December, down 6 points (2.3%) from November. In 2012, the index averaged 241, or 2.4% below 2011. After surging over the July to September 2012 period, on production uncertainties and tightening supplies, cereal export quotations dropped because of weaker demand for feed and industrial uses. In December, maize prices fell sharply, as large export supplies in South America relieved pressure from tight availabilities in the United States. Rice prices also dipped in December, on expectation of good harvests, but wheat values changed little under subdued trade activity.
The Dairy Price Index averaged 197 points in December, up .09% from November. In the last quarter of 2012, dairy prices stabilized, after having risen from mid-year lows. Overall, the dairy market remains well-balanced; however, it is increasingly susceptible to supply changes depending on pasture conditions—especially as southern-hemisphere producers assume an increasing role in supplying the world market—and on feed availability and affordability.
The Oils/Fats Price Index averaged 197 points in December, down 1.9% from November, the fourth consecutive month of decline and the lowest level since September 2010. The main reason for the fall in December is the continued build-up of large global inventories of palm oil—as abundant production in Southeast Asia coincided with a protracted weakness of import demand.
The decline in the index would have been even stronger without the prospect of both a tight global supply and demand situation for soybean oil during the next two to three months and lower than anticipated availabilities of sunflower seed oil.
The Meat Price Index averaged 176 points in December, down marginally from November. Quotes for all meat categories remained close to their November level, except pig meat, which fell by 2%. Overall, the meat sector has had to focus on productivity gains, as increased feed costs have not been associated with higher product prices.
The Sugar Price Index averaged 274 points in December, down marginally from November and its lowest value since August 2010. The expectation of a third consecutive increase in global production and large export availabilities in the 2012-13 marketing season, notably in Brazil, have put international prices under downward pressure for much of the second half of 2012.
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