The latest FAO Food Price Index averaged 209 points in December, down 2 points from November and the lowest level seen since June 2012. The drop is due mainly to declines in grains and oils/fats. Overall, global food prices in 2012 were 7 percent lower than in 2011.

Cereal prices dropped 6 points in December, led by weaker demand for feed grain and larger maize exports from South America. Rice prices also dipped due to expectations of a good harvest.

Oils and fat prices declined 4 points in December. This was the fourth consecutive month of steady decline; oils and fat prices are now at their lowest level since September 2010. A global build-up of palm oil supplies is largely behind this steady decline. Overall, oils and fat prices were 27 points lower in 2012 than in 2011.

Sugar and meat prices also dropped slightly in December but dairy prices rose 2 points.

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