In December 2021, FAO’s world Food Price Index (FPI), adjusted for inflation, fell by almost 1 percent from November, ending a four-month streak of gains averaging 2 percent per month. December’s decline came on weaker pricing for meat, cereal, oils, and sugar, influenced by pandemic-fueled demand concerns and demand-rationing on dollar strength. Dairy was the only subindex showing month-on-month growth.
Year on year, December’s FPI was still up 21 percent on double-digit growth for all five subindexes. Oils, sugar, and cereals saw the strongest gains. The FPI is up a strong 28 percent from the five-year average, adjusted for inflation.
A mix of price shifts led to a small decline in December cereals pricing: Weaker demand pressured wheat, rice, and barley pricing, while corn and sorghum pricing was more resilient. South America was key to price moves, bolstering wheat supply even as the market worried that dryness would curb Brazil’s corn crop.
Vegetable oils saw a steeper drop in December. Palm and sunflower oils softened on demand rationing, per FAO, while soybean and canola were firmer on Indian import demand and tight global stocks, respectively.
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