World food commodity prices dropped around 10% last month on an annualised basis, helped by a retreat in global sugar prices.

The Food and Agriculture Organization of the United Nations (FAO) reported today (5 January) that its Food Price Index averaged 118.5 points in December, down 1.5% from November and 10.1% below December 2022 levels.

For 2023, the index – which tracks five food commodities – stood at 124.0 points, 13.7% lower than the average value in 2022, when an all-time high of 159.7 was reached in March.

Despite the December decline, sugar prices marked the only higher average in 2023 compared to the prior year, standing at the highest value since 2011.

However, in December, the sugar price component index fell to the level since March 2023.

The December drop in international sugar price quotations was “mainly driven by the strong pace of production in Brazil, bolstered by conducive weather conditions”, the FAO said.

Cereal prices rose 1.5% from November but were still 16.6% lower than December 2022. For the year as a whole, the FAO Cereal Price Index stood at 130.9 points in 2023, down 23.8 points (15.4%) from the 2022 record annual average.

The FAO wrote: “After falling for four consecutive months, wheat export prices increased in December, supported by weather-related logistical disruptions in some major exporters and tensions in the Black Sea amidst solid demand. World maize prices also strengthened in December, underpinned by concerns about Brazil’s second crop plantings, and logistical constraints hindering shipments from Ukraine.”

Vegetable oil prices fell marginally month-on-month in December off the back of lower world prices across palm, soy, rapeseed and sunflower seed oils.

The average vegetable oil price index for the year marked a three-year low, down 32.7% from 2022.

The dairy price index rose 1.6% month-on-month due to higher price quotations for butter, whole milk powder and cheese. Its average price for the year was 16.6% below 2022’s figure, “underpinned by lackluster import demand, especially for spot supplies, amid ample stocks in importing countries, reflecting price declines across all dairy products”.

Meanwhile, meat prices dropped 1% as international pig meat prices fell.

“Bovine and poultry meat prices also fell, reflecting less active buying interest in Asia, coupled with ample exportable supplies in large producing regions. By contrast, ovine meat prices rebounded following two months of consecutive drops due to stronger demand ahead of holidays and a decline in slaughter supplies in Oceania as recent rains eased pressure for offloading animals for slaughter,” the FAO stated.