Global Food Prices Fall for Fifth Consecutive Year

5f741eb5-6614-4110-948a-0549cc3dc4c8articleimage.jpg

13 Jan 2017 --- For five years in a row the prices of major food commodities have declined, according to the FAO Price Index. And ‘economic uncertainties’ like unstable exchange rates are expected to influence food markets even more during the coming year, says FAO senior economist Abdolreza Abbassian.

The FAO Food Price Index is a trade-weighted index tracking international market prices for five key food commodity groups: major cereals, vegetable oils, dairy, meat and sugar. Prices averaged 16.6 points for 2016  as a whole - 1.5 percent below levels in 2015. In December, the Index averaged nearly 172 points, unchanged from November.

The production of tropical commodities like sugar and palm oil was impacted by El Nino which put upward pressure on FAO’s Food Price Index, but this was offset by bumper harvests and prospects for staple cereals. Click to Enlarge

Cereal prices fell 9.6 percent from 2015 and were down 39 percent from their 2011 peak, while sugar and vegetable oil prices increased over the year by 34.2 percent and 11.4 percent, respectively.

FAO's Cereal Price Index, increased 0.5 percent in the month of December, with rice and maize quotations firming up while larger-than-expected production estimates in Australia, Canada and Russian led to lower wheat prices.

A breakdown of the commodities

FAO's Vegetable Oil Price Index rose 4.2 percent from November, capping a double-digit annual gain to reach its highest level since July 2014. Both palm oil and soy oil quotations rose, the former due to low global inventory levels and tight supplies, the latter on the prospect of rising use in the biodiesel sectors in North and South America.

The FAO Dairy Price Index also rose, by 3.3 percent, from November, due primarily to higher prices for butter, cheese and whole milk powder and restrained output in the European Union and Oceania.

The FAO Sugar Price Index, while up almost a third over the year, declined 8.6 percent in the last month of 2016. The sharp fall was mainly driven by an ongoing weakening of the Brazilian Real against the U.S. dollar, along with a reported 18 percent jump in expected production in the Centre South, Brazil's main sugarcane-growing region.

The FAO Meat Price Index declined 1.1 percent from its revised November level. Its average value in 2016 was 7 percent below that of 2015, due mainly to falls in the international prices of bovine and poultry meats.

Click to EnlargeClick to Enlarge

To contact our editorial team please email us at editorial@cnsmedia.com

Related Articles

Food Ingredients News

Non-EU countries face new antibiotic rules on meat imports

20 Jul 2018 --- Countries wanting to import meat into Europe will now have to abide by EU laws on antibiotics as part of a new regulation on veterinary medicine. European Parliament has decided that products of animal origin imported by third countries will now have to meet the EU’s requirements of antibiotics use.

Food Ingredients News

Sensient execs on Mazza buy: “We want to take everything out of the botanical”

20 Jul 2018 --- Sensient is eyeing the newly acquired botanical extraction company Mazza Innovation as a strategic pillar for all of its business operations, including colors and flavors. Presented under the new name of “Sensient Natural Extraction” and continuing to operate out of Canada, the new business unit provides a clean extraction opportunity for Sensient Technologies Corp. The acquisition will offer opportunities in sustainability, cost reduction and clean label, as the entire botanical being used can be broken down and distributed among the diverse companies that comprise Sensient.

Food Ingredients News

Weekly Digest: Symrise nominated for Sustainability Award, innovation in cricket protein flours

20 Jul 2018 --- Symrise has been nominated for the German Sustainability Award. Cricket protein brand Seek, has launched a new line of high protein and sustainable baking flours. Michel Burla, Managing Director of the Cereals and Ingredients Division of the Hochdorf Group, is to step down at the end of this year and GEA has been working with Almarai Company in Saudi Arabia to build the nation’s largest and most modern dairy processing facility.

Packaging & Technology News

UK consumer group highlights plight of unrecyclable plastics in supermarkets

20 Jul 2018 --- An invesitgation by UK consumer group Which? has found that nearly one-third of plastic packaging used in supermarkets is either non-recyclable or difficult to recycle, prompting the group to call on the Government to make clear and simple recycling labeling compulsory.

Food Ingredients News

Dairy dilemma: Brexit could lead to butter, yogurt and cheese shortages, warns Arla Foods

19 Jul 2018 --- Arla Foods is warning British consumers will likely face restrictions in dairy supplies once the UK leaves the EU – and this could result in “scare supplies” of highly-priced butter, yogurt and cheese which will be considered “luxury items.” The European-wide dairy cooperative says border breakdown could leave UK consumers with less choice and higher prices.

More Articles