World food prices rounded out 2021 at a ten-year high despite a slight easing in December, with little prospect of relief in the new year.
The FAO Food Price Index compiled by the UN’s Food and Agriculture Organization averaged 125.7 last year, the highest since the 131.9 recorded for 2011. It was up 28.1% from 2020.
Meat, dairy and cereal sub-sets of the index, which tracks changes in the international prices of a basket of commonly traded commodities, also stood at multiple-year highs in 2021. Both meat and dairy were at levels not seen since 2014, while cereals peaked at the highest since 2012.
While the gauge dipped 0.9% month-on-month in December to average 133.7 points, it was still up 23.1% from December 2020. The monthly easing was led by vegetable oils and sugar, with dairy the only sub-component rising last month.
FAO senior economist Abdolreza Abbassian said: “While normally high prices are expected to give way to increased production, the high cost of inputs, [the] ongoing global pandemic and ever more uncertain climatic conditions leave little room for optimism about a return to more stable market conditions even in 2022.”
On a monthly basis, cereal prices dropped 0.6% in December “as falling wheat export quotations amid improved supplies following southern hemisphere harvests more than offset firmer maize prices underpinned by strong demand and concerns over persistent dryness in Brazil”.
The pandemic reportedly played a part for a 3.3% decline in vegetable oil prices last month from November. “Weaker quotations” for palm and sunflower oil reflected “subdued global import demand that may be linked to concerns over the impact of rising Covid-19 cases”, the UN body said.
Meat prices were “broadly stable” in December from a month earlier but were 12.7% higher than 2020.
Dairy rose 1.8% month-on-month “as international quotations for butter and milk powders increased amid lower milk production in Western Europe and Oceania. Cheese prices declined marginally, reflecting a preference for Western Europe dairy producers”.