Annual food prices rise 8% on dairy, Dec. sees slump: FAO

A slump in vegetable oil and dairy product prices saw world food prices decline in December, but not by enough to offset the rise in prices seen throughout the year, a press release from the UN’s Food and Agriculture Organization said Thursday.

Global food prices rose 8.2% in 2017 compared with 2016, as the FAO Food Price Index averaged 174.6 points, its highest level since 2014.

Cereal prices, despite another consecutive year of oversupply in key corn and wheat markets, rose 3.2% versus 2016, but remain overall 37% below the peak achieved in 2011.

Dairy and meat prices drove the upward movement.

The FAO Dairy Price Index jumped 31.5% in 2017 over 2016, with meat also rising 9% from its 2016 level. Vegetable oils were also stronger over the year.

Only sugar arrested the upward momentum, as prices fell 11.2% over the year as Brazil recorded another impressive harvest.

According to the FAO Food Price Index, December prices fell 3.3%, led by a substantial 9.7% fall in the dairy index and a 5.6% fall in vegetable oils versus December 2016.

The FAO Cereal Price Index was unchanged as a fall in the price of wheat was counterbalanced by relatively firmer corn and rice prices.

The FAO Food Price Index is comprised of five price subindexes reflecting global prices for dairy, vegetable oil, sugar, cereal and meat.