World Food Prices Dropped in 2013

Last year, food prices went down by 1.6 percent globally, down 8.8 percent from the record in 2011.

According to the United Nations’ Rome-based Food and Agriculture Organization, the main cause was the global fall of prices for grains, sugar and palm oil.

Food and Agriculture Organization’s monthly index monitors the changes in international prices monthly and serves as the global leading economic indicator for food prices.

In 2011, the main reason for price spike was the lack of cereal supply but now, the fall in prices was caused by higher expected supplies of corn and wheat in 2014.

Favorable weather conditions in several leading producer nations drove to hopes of significant increases in corn output. At a global level, cereal stocks were expected to grow by 13% in 2013 to 564 million metric tons.

The current outlook for grains marks a drastic turnaround since 2012 after extreme heat and dryness. Rising food prices also helped spark the unrest–known as the Arab Spring–that analysts say ultimately ousted the leaders of Tunisia, Egypt and Libya.

On the other hand, the uptick in both dairy and meat prices limited the downfall in 2013.
These products reached record highs because of drought in the world’s top milk exporter New Zealand and strong demand for meat from Asia.

“Demand for milk powder, especially from China, remains strong and processors in the southern-hemisphere are focusing on this product rather than on butter and cheese,” the U.N. said.

“Demand from China and Japan has resulted in beef prices showing consistent growth since the middle of the year,” said the U.N.