São Paulo – This Thursday (10th) in Rome, Italy, the United Nations Food and Agriculture Organization (FAO) announced that food prices were down by an average of 7% in late 2012 from 2011, according to the FAO’s own Food Price Index.
Products whose prices dropped the most were sugar, down 17.1%, dairy, down 14.5%, and oils, down 10.7%. Cereal prices were down 2.4% and meat prices were down 1.1% in 2012 from 2011. The FAO index stood at 211 points by the end of 2012.
The FAO food price index is calculated on a monthly basis, and covers a basket of five product categories: cereals, meats, dairy, sugar, and oils and fats. The index tracks the price variations of commodities in these groups.
According to the assistant director general of the FAO’s Economic and Social Development Department, Jomo Sundaram, late-2012 prices reveal a reversal of July figures, which brought about fear of a food crisis. He said, however, that international coordination and the stagnant world economy have both helped ensure that the price peak was “short-lived,” and that late 2012 prices were lower than those recorded a year earlier.
By the end of December 2012, the cereal price index stood at 250 points. The year-round cereal price index reached 241 points, down 2.4% from 2011. The price of maize dropped because Latin American exports were up and “relieved” pressure on the commodity. Rice prices were also down due to expectations of a good crop.
According to the FAO, oils and fats prices continued to decline in late 2012 because there was an accumulation of palm oil inventories. Dairy products prices also saw a decline in 2012. The dairy index dropped from 221 points in 2011 to 189 in 2012, although in December 2012 dairy prices rose compared with November 2012. According to the FAO, dairy prices remain “well-balanced,” though increasingly susceptible to grazing conditions, and to food availability and accessibility.
The meat price index closed 2012 at 175 points, a slight decline from 2011’s 177 points. The sugar price index closed December 2012 at its lowest level since August 2010. In the whole year, sugar prices were down 17.1% from 2011. One of the reasons why food prices dropped in the second half of last year, according to the FAO, was an increase in global food output, for the third consecutive year, coupled with large volumes of export products, especially in Brazil.
*Translated by Gabriel Pomerancblum
