Over the whole of 2020, the Food Price index averaged 97.9 points, a three-year high and 3.1 per cent increase from 2019 but still well below its peak of 131.9 points registered in 2011, the Food and Agriculture Organisation of the United Nations has said.
This is according to the Food Price Index report released on Thursday, which tracks international prices of most commonly traded food commodities.
The FAO Food Price Index averaged 107.5 points in December, up 2.3 points (2.2 per cent ) higher than in November, marking the seventh month of consecutive increase.
“Except for sugar all sub-indices of the FAO food price index registered modest gains in December with the sub-index of vegetable oil again rising the most followed by that of dairy, meat and cereals.
“For 2020 as a whole, the FAO Food Price Index averaged a three-year high of 97.9 points, 2.9 points 3.1 per cent higher than in 2019, but still well below its peak of 131.9 points registered in 2011,” it said.
In the report, the FAO Food Price Index averaged 115.7 points in December, up 1.3 points (1.1 per cent) from November, marking the sixth consecutive monthly rise.
“Wheat export prices rose further in December reflecting tightening supplies among major exporters concerns over growing conditions in parts of the United States of America and the Russian Federation as well as expectations of lower than earlier anticipated wheat shipments from the Russian Federation following its announcement of an export tax/quota.”
It revealed that among coarse grains, sorghum prices rose sharply in December, as sales from the United States of America, mostly to China, remained robust.
“Maize export prices moved higher sustained by continued concerns over crop prospects in South America with a spillover from sharp increases in soybean prices adding further support, ” the report highlighted.
“International rice prices also rose in December, underpinned by tight Thai and Vietnamese availabilities and heightened buyer interest for Indian and Pakistani supplies.
“For the year as a whole, the FAO Cereal Price Index averaged 102.7 points up 6.4 points (6.6 per cent) from the 2019 average and marking the highest annual average since 2014.
“Tighter supplies and stronger demand raised wheat and maize prices by 5.6 per cent and 7.6 per cent respectively compared to 2019.
“In the case of rice, although global import demand remained lacklustre in 2020 export prices rose 8.6 per cent above their 2019 subdued levels to a six-year high.
“The rebound was the result of production constraints in selected exporters which were aggravated by the imposition of temporary export restrictions by some suppliers during the second quarter of the year as well as logistical bottlenecks,” it said.
It said FAO Dairy Price Index averaged 108.8 points in December up 3.4 points (3.2 per cent) from November and representing the seventh continuous monthly rise.
“International prices of all milk products that constitute the index increased in December, underpinned by strong global import demand mostly induced by concerns over the adverse impacts of drier and warmer weather conditions on Oceania’s milk production.
However, for 2020 as a whole, the FAO Dairy Price Index averaged 101.8 points down 1.0 per cent from 2019.
“Among the different milk products, butter prices registered the sharpest fall followed by whole milk powder while prices of skim milk powder and cheese increased, ” it said.
The FAO Vegetable Oil Price Index averaged 127.6 points in December gaining 4.7 per cent month on month and marking the highest level since September 2012.
“December’s continued strength was mainly driven by firming palm oil values while those of soy, rapeseed and sunflower seed oil also increased.
“International palm oil prices rose for a seventh successive month, chiefly reflecting lingering supply tightness in major producing countries.
“For the whole year, the FAO Vegetable Oil Price Index averaged 99.1 points up 191 per cent from 2019 and marking a three-year high.”
The report said the FAO Meat Price Index averaged 94.3 points in December up 1.7 per cent month on month but still 11.6 per cent below its year-earlier value.
“December marked the third consecutive monthly increase in the value of the index.
“Poultry meat quotations rebounded in December buoyed by a combination of increased import demand especially from the Middle East, high internal sales in the key producing countries and the adverse production impact of avian influenza outbreaks in Europe.
Bovine and Ovine meat quotations increased too mostly on tight supplies from Oceania due to high herd-rebuilding demand.
“For the whole year, the FAO meat price index averaged 95.5 points down 4.5 per cent from 2019.
“Across different meat categories, poultry meat prices registered the biggest fall followed by those of ovine, pig and bovine meats.”
It said the FAO Sugar Price Index averaged 87.0 points in December, retreating slightly 0.5 points from the marked increase recorded in November.
“The relative firmness of sugar prices was influenced by the latest trade data showing sugar imports to China the world’s second-largest sugar importer, surging by 37 per cent year on year between January and November 2020.
“Indonesia also reported increased demand for refined sugar from the food and beverage industry.
“For the year as a whole, the FAO sugar price index averaged 79.5 points up 1.1 per cent from 2019 reflecting a tighter world sugar market in 2020,” the report highlighted.
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