2016 FAO Food Price Index moves lower for fifth consecutive year

The Food and Agriculture Organisation of the United Nations (FAO) Food Price Index* averaged close to 172 points in December 2016 – a similar level to the previous month, as strong gains in vegetable oil and dairy prices offset declines in sugar and meat quotations.

Looking at 2016 as a whole, the Food Price Index averaged 161.6 points – 1.5% lower than the year before. This represented the Index’s fifth consecutive annual decline. Despite sugar and vegetable oil quotations rising considerably during 2016, cereal, meat and dairy prices moved in the opposite direction, which saw the overall average for the Index remain lower than 2015 levels.

The FAO Meat Price Index averaged 161.5 points in December – down 1.8 points, or 1.1%, from November – particularly attributed to a fall in ovine and bovine meat quotations. While the Meat Price Index registered modest growth during 2016, the average for the year remained 7% lower than 2015, with bovine and poultry meat prices recording the largest falls.

The Dairy Price Index average for 2016 was 4% lower than the previous year’s level – although FAO report a substantial recovery in international dairy prices since the middle of last year. The Cereal Price Index for 2016 was considerably lower than in 2015 and down as much as 39% from its peak in 2011.

*The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices, weighted with the average export shares of each of the groups for 2002-2004 (Food and Agriculture Organisation of the United Nations).