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Today at 07.00 – Max van der Heyden
The price index for FAO, the United Nations Food and Agriculture Organization, averaged 132.4 points in December. The index was 2.6 points (1.9%) lower than in November and fell for the tenth consecutive month. This means that globally, food will become cheaper, calculated according to the prices of agricultural raw materials and meat.
An important driving force was the sharp fall in the price of vegetable oils, combined with some declines in grain and meat prices. Dairy and sugar prices have been rising over the past month. The food price index for the whole of 2022 is 143.7 points. This is 18 points or 14.3% higher than in 2021.
The FAO cereal price index averaged 147.3 points in December, which was 2.9 points (1.9%) lower than in November. However, the price index is still 6.8 points (4.8%) above the price index for December 2021. Wheat prices fell in December as the Southern Hemisphere harvest further replenished global stocks. Corn prices also fell compared to previous months due to strong supply from Brazil. However, there is concern about the drought in Argentina. Building prices also fell. Rice prices were rising due to Asian buyers. For the whole of 2022, the grain price index reached a record high of 154.7 points. 23.5 points or 17.9% higher than 2021 and also higher than the previous record year 2011. Wheat and corn prices specifically reached new highs in 2022.
The FAO vegetable oil index averaged 144.4 points in December. 6.7% or 10.3 points lower than in November and the lowest point since February 2021. The decrease was due to lower prices for palm, sunflower, soybean and rapeseed oil. The FAO dairy price index in December was 139.1 points in December. 1.5 points (1.1%) higher than in November. It is the first increase in five months. The price index is also 10.1 points (7.9%) higher than a year ago. Cheese prices rose internationally in December as a result of robust import demand and somewhat tighter supply. Global butter prices fell for the sixth consecutive month. Demand for butter is low and local stocks are often more than adequate. Milk powder prices are slightly lower due to lower prices in Western Europe.
FAO’s meat price index stands at 113.8 points in December. 1.4 points lower than in November (1.2%). The price index falls for the sixth consecutive month, but is still 2.8 points or 2.5% higher than December 2021. In particular, beef and poultry prices were lower in December. This was partly combined with higher prices for pork, sheep and lamb. The sugar price index stood at 117.2 points in December, 2.8 points (2.4%) higher than in November and the second increase in a row. The price index reached its highest point in six months. The increase was partly caused by concerns about the impact of weather on crop yields in India and slower production in Thailand and Australia.
For 2022 as a whole, the price index stood at 114.5 points, 5.1 points (4.7%) higher than in 2021 and the highest average since 2012.
Max van der Heyden
Max writes about the commodity markets and everything related to them. His focus is mainly on grains, coffee and cocoa. He also gets up early every morning to put the market starter on paper. Max likes to cook, eat and travel.
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