Friday, January 8, 2016

Global Food Export Prices Fell Dramatically in 2015

The dramatic decrease in the FAO food price index is worth noting. It has steadily been falling for four years. Some of this is attributed to the strength of the dollar, but it also reflects the world's growing ability to produce food, as well as deflationary forces and low oil prices.

Background definition: The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices, weighted with the average export shares of each of the groups for 2002-2004 that are sugar, meat, cereals, dairy, and vegetable oils.
  • the FAO food price index fell 19 percent in 2015
  • the index dropped one percent in December
  • 2015 was the fourth year in a row that the index dropped
  • the cereal price decreased 15.4 percent in 2015
  • the vegetable oil index decreased 19 percent in 2015 and reached a nine year low
  • the dairy index went down 28.5 percent in 2015
  • the meat price index went down 15 percent, setting a record
  • the sugar index was 20 percent lower in 2015 than it was in 2014