Despite December Decline, FAO Food Price Index Remains Highest on Record in 2020

According to the U.N. Food and Agriculture Organization, global prices for food commodities like grain and vegetable oils were the highest on record in 2020 despite a nine-month decline. This was attributed to Russia’s war in Ukraine, drought and other factors that drove up inflation and worsened hunger worldwide.

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, dipped by 1.9% in December from a month earlier. This decline was led by a drop in the price of vegetable oils due to shrinking import demand and expectations of increased soy oil production in South America.

The index for cereals was down 1.3%, while the index for dairy products fell by 1.2%. The index for sugar was the only one to rise, increasing by 0.7%.

The FAO’s Director of Trade and Markets, Arfaoui Smail, said that the index’s decline in December was “a welcome development” but warned that “the overall outlook for 2021 remains uncertain.” He noted that the “persistent impact of the COVID-19 pandemic on global food markets” could lead to further volatility in food prices.

The FAO’s Food Price Index is an important indicator of global food security, as it helps to monitor the impact of food price fluctuations on the availability and affordability of food for vulnerable populations. The organization is committed to helping countries mitigate the effects of food price volatility and ensure access to safe, nutritious and affordable food for all.