Global food prices rose by 8.2% in 2017 compared to the previous year, the UN Food and Agriculture Organization (FAO) has warned. The FAO Food Price Index, which measures monthly changes in international prices of a basket of food commodities, reached the highest annual average since 2014. According to the latest FAO Food Price Index issued on January 11, global food prices in December 2017 declined by 3.3% from November, led by sharp decreases for vegetable oils and dairy products. However, despite the decrease last month, the Food Price Index averaged 174.6 points in 2017, compared to 161.5 points in 2016 and 164 points in 2015. However, food prices were still 24% below the 2011 high of almost 230 points.

While sugar prices fell in 2017, dairy and meat prices registered sharp year-on-year increases, the UN food agency said. The Dairy Price Index was 31.5% higher over the whole of 2017 than the previous year, jumping from 153.8 to 202.2 points. Meat prices in 2017 rose by 9%, but remained 4.7% below the average for the preceding five years. Ovine meat registered the largest increase, followed by pigmeat, poultry and beef. The FAO Cereal Price Index was 3,2% higher in 2017 than in 2016, climbing from 146.9 to 151.6 points. However, world cereals prices were still 37% lower than during the peak in 2011, when the index soared to 240.9 points. Sugar prices were 11.2% lower, on average, in 2017 than in 2016, due largely to a bumper harvest in Brazil, the world’s leading producer. The prospects for 2018 are still uncertain. FAO senior economist Abdolreza Abbassian told Reuters that it was too early in the year to predict what effect weather conditions would have on harvests. He said that oil prices are also driving developments. “If oil prices are the highest in a couple of years, all you need is some sort of unexpected development in one of the big oil producing countries to see a spike in oil and that would definitely spill over to other commodities,” Abbassian said. He projects that the new year is going to be “a little more uncertain, a little more volatile and unpredictable”. (ab)