ROME — The Food and Agriculture Organization of the United Nations said the FAO Food Price Index dropped for the third straight month in December, falling 1.1 percent to 209.3, down from 211.7 in November and compared with 214.4 in October and 215.7 in September.
The decrease reflected drops in the international prices of major cereals and oils and fats.
For 2012, the FAO index averaged 212, which was down 7 percent from 2011. The sharpest year-over-year declines were registered by sugar (down 17 percent), dairy products (down 15 percent) and oils (down 11 percent). Year-over-year price declines also were noted in cereals (down 2 percent) and meat (down 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 the FAO’s Economic and Social Development Department. “But international coordination, including through the Agricultural Marketing Information System, 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 Meat Price Index averaged 175.6 points, down from 177 points in November, as prices of all meat categories remained close to their November level, except pig meat, which fell by 2 percent. The index averaged 175 points during 2012, second only to the 177 points recorded during 2012.
The Dairy Price Index averaged 196.8 points, up 0.9 percent, or 2 points, from November. The FAO noted that overall, the dairy market remains well-balanced, but is increasingly susceptible to supply changes related to pasture conditions, and feed availability and affordability.
The FAO Cereal Price Index was at 249.6 points in December, down 2 percent, or 6 points, from November. In 2012 as a whole, the Cereal Price Index averaged 241.
“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,” the FAO said. “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.”
The Sugar Price Index averaged 273.8 points in December, down marginally from 274.5 points in November. The index averaged 306 points during 2012. Expectations of a third consecutive increase in global production and large export availabilities in the 2012-13 marketing season, especially in Brazil, kept international prices down for much of the second half of 2012, the FAO said.
The Food Price Index consists of the average of five commodity group price indices weighted with the average export shares of each of the groups for 2002-04. In total, 55 commodity quotations considered by FAO commodity specialists as representing the international prices of the food commodities are included in the overall index.
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