932. December 2023 World Food Price Index

On January 5, the Food and Agriculture Organization (FAO) released the World Food Price Index for December 2023. The December average was 118.5 points, a decrease of 1.8 points (1.5%) from the previous month. This decrease was due to the decrease in the prices of sugar, vegetable oil and meat, which offset the increase in the prices of dairy products and cereals. The monthly price index recorded a decrease of 13.3 points (-10.1%) compared to the previous year, with the overall average for 2023 of 124.0 points being 13.7% lower than the average for 2022.

The Cereal Price Index increased by 1.5% to 122.8 points in December, but remained 16.6% below the previous year's level. Wheat export prices rose in December after four months of declines, driven by robust demand and supply constraints due to weather problems at major export ports and tensions in the Black Sea. World corn prices also rose on concerns about the second planting season in Brazil and logistical issues related to transportation from Ukraine. Rice prices, reflecting the rise in Indica rice prices due to export restrictions in India and supply shortages from Vietnam, rose 1.6% from November. Over the course of 2023, the rice price index increased by 21% due to concerns about the impact of El Niño and the influence of export restrictions imposed by India. Overall, the average grain price index for 2023 was 130.9 points, down 15.4% from the previous year.

After several months of decline, the Vegetable Oil Price Index rose slightly in November, but fell 1.4% in December from the previous month. Despite seasonal supply shortages in exporting countries, palm, soybean, sunflower and rapeseed oil prices fell due to reduced demand from major consuming countries. World soybean oil prices fell 3% in November due to improved weather conditions in Brazil, a major producer, in response to reduced demand from the biodiesel sector. The full-year vegetable oil price index for 2023 was 126.3 points, a significant decrease of 61.5 points (32.7%) from 2022.

In December, sugar prices fell 16.6% from the previous month, reaching a nine-month low. However, they remained 14.9% higher than in the same month last year. The decline in the December price index was influenced by favorable production conditions in Brazil, low returns in the ethanol sector and restrictions imposed by the Indian government on the conversion of sugar cane to ethanol production for the current season. Concerns about a tight global supply/demand balance throughout 2023 helped keep sugar prices at 145 points, a 26.7% increase from 2022 and the highest level since 2011.

Contributor: IIYAMA Miyuki (Information Program)