In spite of a sudden decline at the end of 2011, the FAO Food Price Index ended the year at its highest level since the Food and Agriculture Organisation of the United Nations began compiling the index in 1990. The average for all of 2011 was 228, also the highest in the index history.
From November to December, the index fell five points (2.4%) to 211, 27 points (11.3%) lower than it was in February 2011. The sharp decline was due in part to increased sugar and oils’ crops in the year, reducing demand, and concerted reduction in cereal prices across the board, which were accentuated by a higher US dollar.
Cereal prices fell 4.8% between November and December, to 218 points, led by maize (- 6%), wheat (- 4%) and rice (- 3%). Overall the cereal index, which has been running far longer than the overall Food Price Index, averaged 247 points, the highest level in almost fifty years.
Commenting on the new figures, FAO senior grains economist Abdolreza Abbassian said that it was difficult to make any firm prediction on price trends for the coming months.
“International prices of many food commodities have declined in recent months, but given the uncertainties over the global economy, currency and energy markets, unpredictable prospects lie ahead,” Abbassian said.
Of special interest to New Zealand producers, both meat and dairy indexes maintained their November level. Meat was down just marginally due to a fall of 2.2% in pig meat prices, while poultry and beef recorded minor increases. Overall global meat prices were 16% higher on average throughout 2011.
Dairy also maintained higher average prices throughout the past year, up 10% on 2010. Skim milk powder and casein led the increases, both recording 17% higher averages, while whole milk managed 11% and cheese just 8%.
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