Mammoth supplies and sluggish economic growth pushed down prices of the major food commodities – grain, dairy, meat, vegetable oils and sugar – by a combined average of 19 percent in 2015, said the UN Food and Agriculture Organization. It was the fourth year in a row that the FAO’s Food Price Index declined. As well, the index dropped by 1 percent during December. “Abundant supplies in the face of a timid world demand and an appreciating dollar are the main reason for the general weakness that dominated food prices in 2015,” said FAO senior economist Abdolreza Abbassian.
Cereal grain prices fell by 1.2 percent in anticipation of Argentina’s removal of export taxes would bring more wheat onto the world market. Global meat prices were down by 2.2 percent in December due to less U.S. demand for beef imports and by a surge in pork production in Europe.
In the companion Cereal Supply and Demand Brief, FAO said consumption would rise by 1 percent during the 2015/16 market year. “This would imply a sharp slowdown from the 3.2 percent and the 4.3 percent growth registered in 2014/15 and 2013/14, respectively, due mainly to less robust demand prospects for feed and industrial uses,” said FAO.