Food prices fell in December 2011 with the FAO Food Price Index dropping 2.4 percent, or five points from November. At its new level of 211 points, the Index was 11.3 percent (27 points) below its peak in February 2011.
The decline was driven by sharp falls in international prices of cereals, sugar and oils due to bumper 2011 crops coupled with slowing demand and a stronger US dollar. Most commodities were affected. However, although prices dropped steadily in the second half of 2011, the Index averaged 228 points in 2011 — the highest average since FAO started measuring international food prices in 1990. The previous high was in 2008 at 200 points.
Among the principal commodities, cereal prices registered the biggest fall, with the FAO Cereal Price Index dropping 4.8 percent to 218 points in December. Record crops and an improved supply outlook sent prices of major cereals declining significantly. Maize prices fell 6 percent, wheat 4 percent and rice 3 percent. In 2011, the FAO cereal price index averaged 247 points, up some 35 percent from 2010 and the highest since the 1970s.
The FAO Meat Price Index averaged 179 points, slightly down compared with November. The decline was mainly driven by pig meat, whose price dropped by 2.2 percent, with sheep meat also receding somewhat. By contrast, poultry and bovine meat prices recorded mild gains. On an annual basis, meat prices in 2011 were 16 percent higher than in 2010.
Thursday January 12, 2012/ FAO.