FAO: Global food prices increased by 28% in 2021

The Food and Agriculture Organisation (FAO) says global food prices rose sharply in 2021.

In a statement on Thursday, FAO said its food price index, which tracks changes in the international prices of commonly traded food commodities, averaged 125.7 points in 2021.

The organisation said the figure is 28.1 percent above the previous year.

Speaking on the development, Abdolreza Abbassian, FAO senior economist, said global pandemic and uncertain climate conditions leave little room for optimism about market stability.

“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,” Abbassian said.

Food prices, according to the report, fell slightly in December 2021 due to the notable drop in international prices of vegetable oils and sugar.

It added that the food price index averaged 133.7 points in December, a 0.9 percent decline from November, but still 23.1 percent more than in December 2020.

Only the dairy sub-index posted a monthly rise in the last month.

The cereal price index also decreased 0.6 percent; for the full year, however, it reached its highest annual level since 2012, rising 27.2 percent.

The biggest gainers were maize, up 44.1 percent, and wheat, gaining 31.3 percent. One of the world’s other key staple foods, rice, lost 4 percent.

“The FAO Vegetable Oil Price Index declined 3.3 percent in December, with weaker quotations for palm oil and sunflower oil reflecting subdued global import demand that may be linked to concerns over the impact of rising COVID-19 cases,” the report reads.

“For 2021 as a whole, the FAO Vegetable Oil Price Index reached an all-time high, increasing 65.8 percent from 2020.

“The FAO Sugar Price Index decreased by 3.1 percent from November, reaching a five-month low, reflecting concerns over the possible impact of the Omicron COVID-19 variant on global demand as well as a weaker Brazilian Real and lower ethanol prices.

“For 2021 as a whole, the FAO Sugar Price Index rose 29.8 percent from the previous year to its highest level since 2016.”

The report added that the meat price index was “broadly stable” in December, but rose 12.7 percent through the year as a whole.

Dairy was the only category where prices increased in the last month of the year, rising 1.8 percent in November, mostly because of lower milk production in Western Europe and Oceania.

Cheese prices declined marginally last month, but for the year overall, the dairy price index averaged 16.9 percent higher than in 2020.