Food Prices Fell for Ninth Month in a Row in December, UN's FAO Says -- WSJ - MarketWatch

By Yusuf Khan

Food prices fell for the ninth consecutive month in December, dropping to levels just below a year earlier, according to a report published Friday by the Food and Agriculture Organization of the United Nations.

The FAO's food-price index, a closely watched barometer of global food prices, averaged 132.4 points in December, 1% below a year earlier and down 1.9% on month, the U.N. body said.

Food prices had soared during the first half of 2022, driven by the war in Ukraine as well as extreme weather across different parts of the globe causing volatility in key foodstuffs such as grains and oilseeds. The FAO said international prices of commonly-traded food commodities averaged 143.7 points through the year--14.3% higher than the average value over 2021.

"Calmer food commodity prices are welcome after two very volatile years," FAO Chief Economist Maximo Torero said.

"It is important to remain vigilant and keep a strong focus on mitigating global food insecurity given that world food prices remain at elevated levels, with many staples near record highs, and with prices of rice increasing, and still many risks associated with future supplies," Mr. Torero said.

December's fall was contributed to in part by falling vegetable-oil prices, with the U.N. body's index down 6.7% from November to reach its lowest level since February 2021. Subdued demand for palm, sunflower and rapeseed oils helped drag prices down, as did stronger production of soy oil from South America.

The FAO's cereal price index fell 1.9% on month, helped by continuing harvests of wheat in the southern hemisphere as well as strong production of corn from Brazil. That said, some of the decline was mitigated by a rise in rice prices, with a fall in the U.S. dollar pushing up prices from exporting countries. Despite the monthly fall, prices are still 4.8% higher than they were in December 2021.

Meat prices fell 1.2% on month as lower world prices of bovine and poultry meats outweighed higher pig and mutton, sheep and lamb meat prices, the FAO said.

Dairy prices rose 1.1% in December, having fallen for five months in a row. Higher cheese prices were the key reason, led by tighter market conditions. Prices are still 7.9% higher than they were a year ago.

Sugar prices, meanwhile, rose 2.4% on month, a second consecutive monthly rise and the highest level seen in six months. Much of this was led by concerns over India's harvest, with poor weather affecting the globe's second largest producer.

Write to Yusuf Khan at yusuf.khan@wsj.com

-0-

Adblock test (Why?)

Article From & Read More ( Food Prices Fell for Ninth Month in a Row in December, UN's FAO Says -- WSJ - MarketWatch )
https://ift.tt/xTeE1SJ
food