Food prices are likely to remain high during 2013 but fell 7% over the past year, calming fears of a renewed food price crisis, according to the UN’s Food and Agriculture Organization (FAO).
The FAO’s food price index, based on the prices of a basket of internationally traded food commodities, was at its lowest level in December since June. At 209 points – compared to 200 in June – the index was down 1.1% on November levels, while the year average was 212 points.
The sharpest declines during the year were for sugar, which slipped 17.1%, dairy products (down 14.5%) and oils (10.7%). Meanwhile, cereal prices fell just 2.4% and meat prices fell 1.1% over the period.
Assistant director-general in charge of FAO’s Economic and Social Development department, Jomo Sundaram, said in a statement: “The result marks a reversal from the situation last July, when sharply rising prices prompted fears of a new food crisis. But international coordination… as well as flagging demand in a stagnant international economy, helped ensure the price spike was short-lived and calmed markets so that 2012 prices ended up below the previous year’s levels.”
Maize exports from South America in December eased market pressure and caused a sharp fall in prices, but cereal stocks in general remain low going into 2013. However, for 2012 as a whole, the cereal price index was 2.4% lower than the 2011 level.
Last month, the World Bank warned of a ‘new norm’ of high food prices, although it said better international cooperation had prevented panic policies like the imposition of export restrictions when prices started to spike. This has helped to stabilise world food prices, it said.