Global food commodity prices down sharply in 2023

Global prices for food commodities fell last month and ended the year 10% below their level in December 2022, the UN Food and Agriculture Organization reported Friday.

The FAO Food Price Index, which tracks monthly changes in the cost of major commodities, dropped 1.5% in December to 118.5 points, down 10.1% from December 2022. 

For 2023 as a whole, the index averaged 124 points, 13.7% below the average for 2022. 

Sugar prices plunged 16.6% in December, hitting a nine-month low, and the FAO price index for vegetable oils declined 1.4%, reflecting slower sales of palm, soybean, rapeseed and sunflower seed oil, FAO said. 

Soybean oil prices dropped by 3% in December due to  a slowdown in biofuel demand and improved weather in Brazil, the largest producer of soybeans. 

The vegetable oil index was down 32.7% in 2023 from 2022. 

The steep drop in sugar prices was due to increased production in Brazil and reduced sugar demand in India for ethanol production, FAO said. 

The FAO price index for grains increased 1.5% in December, reflecting higher prices for wheat, corn, rice and barley. But the index for 2023 as a whole was 15.4% lower than in 2022. 

The index for meat prices fell 1% in December, led by slower demand for pork, beef and poultry.

The dairy index was up 1.6% in December, as prices for butter and cheese increased. But the dairy index was still 16.1% below its December 2022 level. 

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