FAO: Food price index starts 2016 dropping to nearly 7-year low

gida2016-1

Photo: UNIC Ankara

The global Food Price Index, calculated by the United Nations Food and Agriculture Organization (FAO) on a monthly basis, fell in January, slipping 1.9 percent below its level in the last month of 2015, as prices of all the commodities it tracks dropped, sugar in particular.

FAO’s Food Price Index is a trade-weighted index tracking international market prices for five key commodity groups: major cereals, vegetable oils, dairy, meat and sugar. It averaged 150.4 points in January, down 16 per cent from a year earlier and registering its lowest level since April 2009.

The main factors underlying the lingering decline in basic food commodity prices are the generally ample agricultural supply conditions, a slowing global economy, and the strengthening of the United States dollar, the UN agency noted in a news article.

This month, FAO also raised its forecast for worldwide cereal stocks in 2016, as a result of lowering its projected consumption and raising 2015 production prospects.