FAO Food Price Index down 7 percent in 2012

WASHINGTON, Jan. 10 2013 - The FAO Food Price Index dropped for the third consecutive month in December 2012, edging down 1.1 percent. 

The decline in December, when the Index averaged 209 points, was led by drops in the international prices of major cereals and oils and fats. The Index’s previous low in 2012 was in June, at 200 points. 

For 2012 as a whole, the Index averaged 212, that is, 7.0 percent less than in 2011, with the sharpest falls year-on-year registered by sugar (17.1 percent), dairy products (14.5 percent) and oils (10.7 percent). Price declines were much more modest for cereals (2.4 percent) and meat (1.1 percent). 

“The result marks a reversal from the situation last July, when sharply rising prices prompted fears of a new food crisis,” said Jomo Sundaram, Assistant Director-General in charge of FAO’s Economic and Social Development Department. “But international coordination, including through (programs such as) the Agricultural Market Information System (AMIS), as well as flagging demand in a stagnant international economy, helped ensure the price spike was short-lived and calmed markets so that 2012 prices ended up below the previous year’s levels.” 

The FAO Cereal Price Index averaged 250 points in December, down 2.3 percent, or 6 points, from November. In 2012 as a whole, the index averaged 241, or 2.4 percent below 2011. 

After surging between July and September 2012 due to production uncertainties and tightening supplies, cereal export prices dropped because of weaker demand for feed and industrial uses. 

In December, maize prices fell sharply as large export supplies in South America relieved market pressure. Rice prices also dipped in December on expectation of good harvests, but wheat values changed little as trade remained subdued.  

For more on this year’s FAO Food Price Index, click here.

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