Prices of major food commodities around the world have declined for the fifth year in a row, the FAO reported today (12 January). It suggested its total food price index averaged 161.6 points for the year, around 1.5% below metrics reported in 2015.
The FAO’s Food Price Index is a trade-weighted listing that tracks the international market price of five key food commodity categories: cereals, vegetable oils, dairy, meat and sugar.
December 2016 saw the Meat Price Index fall slightly by 1.1% compared with November 2016. However, the average value for the full year is down 7% when compared to 2015. The FAO said the fall was largely attributable to pricing volatility, largely downward, on prices of beef and poultry around the world.
‘Economic uncertainty’ to pressure prices
The Meat Index Price fall was the second-largest decline out of all commodity categories in December.
The FAO’s Sugar Price Index recorded the largest drop, falling 8.6% in the last month of 2016 as the ongoing devaluation of the Brazilian real against the US dollar significantly dented value for Brazil’s sugarcane industry.
With prices overall falling for the fifth year in a row, the FAO is warning that the global economy should expect more decline.
“Economic uncertainties, including movements in exchange rates, are likely to influence food markets even more so this year,” said FAO senior economist Abdolreza Abbassian.
However, while the FAO reports food prices have fallen for the fifth consecutive year, meat prices have declined for only two consecutive years.