The Food and Agriculture Organization of the United Nations (UN FAO) reported that food prices experienced a decline in December. Lower prices for sugar, vegetable oils, and meat were the key factors offsetting the increases in dairy products and cereals. According to the UN FAO's food price index, which monitors global prices for staple foods, the average index value in December was 118.5 points. This represents a 1.5% decrease from November and a 10% decrease from the previous year.
Sugar Prices Drop, Vegetable Oil Prices Fall
In December, sugar prices plummeted by approximately 17%, marking the lowest level in the past nine months. The drop was fueled by Brazil's strong sugar production and India's reduced utilization of sugarcane for ethanol production. Similarly, vegetable oil prices fell by 1.4%, mainly because of weaker demand in the biodiesel sector for soy oil. Meat prices also saw a decline of 1%, partially due to diminished import demand from Asia, particularly for pig meat.
Cereal Prices Rise Amid Logistics Disruptions
While logistical disruptions affected the shipment of cereals from major exporting countries, cereal prices increased by 1.5% in December. However, the overall index remains significantly lower than the 2022 average, indicating well-supplied global markets, as stated by the UN body. On the other hand, dairy prices rose by 1.6% in December, driven by higher prices for butter and cheese in Western Europe, coinciding with the holiday season.