The FAO released today its Food Price Index for November. The Index fell slightly in October to 213 points, largely due to lower international prices for cereals, oils, and fats. The report also finds that for the first 10 months of 2012, international food prices were on average eight percent lower than during the same period in 2011.
The Cereals Price Index fell three points from September because of slightly lower maize and wheat prices. Wheat prices fell due to reduced trade activity, while slowing demand from the livestock and industrial sectors drove maize prices down. Despite this decline, the Cereals Price Index remains 12 percent higher than it was in October 2011; however, it is still 15 points below its record peak of April 2008. The Oils/Fats Price Index dropped 18 points from September, reaching its lowest level in two years.
The FAO also released its bi-annual global market report today, the Food Outlook. The report finds that lower international prices and freight rates, together with lower global cereal purchases, could mean a lower global food import bill in 2012. Current forecasts put the world's food import expenditure at $1.14 trillion, 10 percent lower than last year's record level. FAO Director-General José Graziano da Silva says that despite tight market conditions, improved international coordination and market transparency have helped to keep recent events, such as the US drought, from spiraling into full-blown food crises.