Food Commodity Prices Rise 8.2% in 2017

Global food prices declined in December, led by sharp decreases for vegetable oils and dairy products, according to the latest data from the UN’s Food Agriculture Organization (FAO). The Food Price Index averaged 169.8 points in December 2017, down 3.3 percent from November. For 2017, the index was up 8.2 percent from 2016 and representing the highest annual average since 2014 although still 24 percent below the 2011 high of almost 230 points.

The Cereal Price Index averaged 152.7 points in December, down marginally from November but still up 7.4 percent from December 2016. Ample supplies and slower sales contributed to weaker wheat prices; however, maize and rice prices firmed up slightly. Overall, the cereal index averaged 151.6 points in 2017, up 3.2 percent from 2016 but still 37 percent below its 2011 peak.

The Vegetable Oil Price Index averaged 162.6 points in December, down 9.6 points (5.6 percent) from November, marking a 5-month low. The drop mainly reflects lower quotations for palm, rapeseed and soybean oils. International palm oil prices tumbled, as stocks in Malaysia and Indonesia swelled to 2-year highs on the back of relatively strong production and weak export demand. Upward revisions of crops in Canada and Australia weighed on rape oil prices, whereas soy oil quotations were pressured by rival palm oil. Overall, the vegetable oil index averaged nearly 169 points, up 3 percent from 2016 but still well below the peaks recorded in 2008 and 2011.

The Dairy Price Index averaged 184.4 points in December, down 19.8 points (9.7 percent) from November, marking the third successive month of decline. High export supplies and subdued demand weighed on the international prices of all skim and whole milk powders as well as cheese and butter. Overall, the dairy index averaged 202.2 points in 2017, up 31.5 percent from 2016, with the largest increase recorded for butter followed by whole milk powder (WMP) and cheese. SMP prices remained stable.

The Sugar Price Index averaged 204 points in December, down 8.6 points (4.1 percent) from November due to seasonal factors and expectations of a large surplus in the year ahead. Overall, the sugar index averaged 227.3 points in 2017, down 11.2 percent from 2016 and as much as 38 percent from its 2011 peak. The decline in sugar prices in 2017 largely reflected a bumper harvest in Brazil, the world’s largest producer, along with strong production recoveries in India and Thailand.

The Meat Price Index averaged 171.6 points in December, marginally below its slightly revised value of November. International price quotations for bovine meat fell while pig, poultry and ovine meat quotations witnesses slight movement, reflecting an overall balanced supply and demand situation. Overall, the meat index averaged 170 points in 2017, up 9 percent from 2016.