World food commodity prices backed off in December, ending slightly lower on the year.
The Food and Agriculture Organization (FAO) of the United Nations on Friday reported that its food price index averaged 127 points last month. That was down 0.5% from November following three consecutive monthly increases, although still 6.7% higher than the same month a year earlier.
For 2024 as a whole, the overall food price index averaged 122 points, 2.1% lower than the previous year as major price declines for cereals and sugar offset smaller ‘but not insignificant’ gains in prices for vegetable oils, dairy and meats.
The FAO food price index tracks monthly changes in the international prices of a set of globally traded food commodities. The index hit its peak in March 2022, following the Russian invasion of Ukraine (see graph below).
The cereal price index was relatively unchanged in December versus November, but 9.3% below its year-earlier level, as a marginal uptick in corn values offset a drop in in wheat. The cereal index averaged 113.5 points in 2024, down 13.3% from 2023 and marking the second annual decline from the 2022 record level.
The vegetable oil index eased 0.5% in December compared to a month earlier but was still roughly one-third higher than December 2023. For the entire year, the index averaged 9.4% higher than in 2023 amid ‘tightening global supplies.’
The marginal decrease in the vegetable oil index mainly reflected lower soy, rapeseed and sunflower oil prices, more than offsetting slightly higher palm oil prices. In December, international palm oil quotations on average increased by 2% from the previous month, largely driven by protracted tight supplies in leading producing countries in Southeast Asia. In contrast, world soyoil prices fell moderately, underpinned by prospects of ample global supplies and somewhat weaker US demand. Global rapeseed and sunflower oil prices also declined due to contraction in demand, the FAO said.
The FAO’s December meat price index was up 0.4% from November and 7.1% higher than the same month last year. For the year, the meat index averaged 2.7% higher than 2023, owing in part to higher beef prices.
Following seven straight monthly increases, the dairy price index eased 0.7% in December but remained 17% above last year. Amid rapidly rising butter prices, the dairy index averaged 4.7% higher than in 2023.
The sugar price index was down 5.1% in December and 10.6% below last year amid improving production prospects in the main producing countries. The sugar index in 2024 averaged 13.2% lower than in 2023.
