Global food prices rise for 7th consecutive months in December

The Food and Agriculture Organisation (FAO) of the United Nations on Thursday reported that the world food prices had risen for the seventh consecutive months in December, led by dairy products and vegetable oils.

The FAO Food Price Index averaged 107.5 points in December, up by 2.2% than in November.

Over the whole of 2020, the benchmark index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 97.9 points, a three-year high and a 3.1% increase from 2019 although still more than 25% below its historical 2011 peak, an FAO report reads.

The FAO Cereal Price Index rose 1.1% from November and for all of 2020 averaged 6.6% above the level of 2019.

Export prices for wheat, maize, sorghum and rice rose in December, moving higher in part due to concerns over growing conditions and crop prospects in North and South America as well as in Russia.

On an annual basis, rice export prices were 8.6% up in 2020 than in 2019, while those for maize and wheat were 7.6% and 5.6% higher, respectively.

The FAO Vegetable Oil Price Index gained 4.7% in December to reach its highest level since September 2012. 

In addition to ongoing supply tightness in major palm-oil-producing countries, international trade was affected by a sharp hike in export duties in Indonesia.

The international prices for soy oil rose in part due to prolonged strikes in Argentina that impacted both crushing activity and port logistics. This sub-index averaged 19.1% higher in 2020 than the previous year.

The FAO Dairy Price Index increased 3.2% in December, its seventh consecutive monthly rise, with all categories higher due to strong global import demand induced by concerns over drier and warmer conditions on Oceania's milk production as well as high internal demand in Western Europe. 

Throughout 2020, however, the Dairy Price Index averaged 1% less than in 2019.

Meanwhile, the FAO Meat Price Index increased 1.7% in December, while its full-year average was 4.5% below that of 2019. 

Besides, the FAO Sugar Price Index declined by 0.6% in December after a marked increase during the previous month.