Global food prices plunged by nearly 20% in 2015

By Niamh Michail

- Last updated on GMT

Rice quotations in 2015 were more stable than wheat or maize.  Photo copyright: Istock /  Jeremy Richards
Rice quotations in 2015 were more stable than wheat or maize. Photo copyright: Istock / Jeremy Richards

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In 2015 prices of the world’s major commodities fell for the fourth year in a row, averaging nearly one fifth (19.1%) lower than in 2014, says the UN’s Food and Agriculture Organisation (FAO).

"Abundant supplies in the face of a timid world demand and an appreciating dollar are the main reason for the general weakness that dominated food prices in 2015,"​ said Abdolreza Abbassian, senior economist at the FAO.

The FAO’s trade-weighted index, which tracks prices on international markets of five major food commodity groups, averaged 164.1 points for 2015 overall but ended on an even lower note, falling to 154.1 points in December, as drops in meat, dairy and cereals outweighed the gains seen for sugar and vegetable oils.

Compared to 2014, cereals prices fell by 15.4% in 2015 due to a number of factors across crops. The removal of export taxes in Argentina led to expectations of larger suppliers entering the global market which lowered wheat prices, while a sluggish international demand for maize in December also drove prices downwards, according to the report.

The vegetable oil index, on the other hand, rose by 2.1% in December, driven by uncertainties over Brazil’s soybean crop. But for 2015 as a whole, the vegetable index fell by 19% from 2014, hitting a nine-year low. Palm oil prices remained stable as concerns over a drop in production in Southeast Asia were offset by weak global demand for imports.

Meanwhile, dairy saw its lowest annual average since 2009, falling by over a quarter (28.5%) since 2014. 

“Weak demand for whole milk powder has led manufactures to focus on producing other dairy commodities. Butter was the product most in demand, particularly in the Middle East, North America and North Africa, which boosted its price by over 3% in December,” ​the report said.

December sugar prices were up 0.6% on November’s as there were concerns that harvests would be delayed following excessive rain in south-central Brazil. But for 2015 as a whole sugar prices were 21% lower than in 2014, averaging 190.7 points.

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