The United Nations Food and Agriculture Organization (FAO) announced on Friday that global food prices continued their downward trend in January, marking the fifth consecutive month of decline. The drop was largely driven by softening international prices for dairy, sugar, and meat products.
The FAO Food Price Index at a Glance According to the latest report, the FAO Food Price Index—which tracks monthly changes in the international prices of a basket of commonly traded food commodities—averaged 123.9 points in January. This represents a 0.4% decrease from December’s levels and a 0.6% decline compared to the same period last year.
Most notably, the index is now 22.7% lower than its all-time peak recorded in March 2022, following the onset of global supply chain disruptions.
Dairy and Sugar Lead the Decline Dairy products saw the most significant monthly drop among the major commodity groups, falling by 5% in January. This sharp decline was attributed to a surplus of exportable supplies and lower-than-expected demand for cheese and butter in major global markets.
Sugar prices also eased, continuing a correction from the highs seen in previous quarters, while meat prices remained under downward pressure due to increased supply from major exporting regions.
Economic Outlook and Market Stability Economists suggest that the sustained decline in the FAO index provides some relief to global inflationary pressures, particularly in developing nations heavily reliant on food imports. However, the organization remains cautious, noting that factors such as extreme weather events, geopolitical tensions, and fluctuating energy costs could still impact food security and price stability in the coming months.
The FAO will continue to monitor the grains and vegetable oil sectors, which have shown more resilience to the downward trend compared to livestock and dairy products.
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