In December, the Food and Agriculture Organization of the United Nations (FAO) Food Price Index decreased 2.4%, or 5 points from November.
Totaling 211 points, the Index was 11.3% (27 points) below its peak in February. The FAO Meat Price Index, which averaged 179 points, was down slightly vs. November.
The Meat Price Index's decline was primarily driven by pork, which dropped in price 2.2%. Sheep meat also declined somewhat. However, poultry and bovine meat prices tallied slight gains. On an annual basis, meat prices were 16% higher in 2011 versus 2010.
Looking at the big picture, although prices dropped during the second half of 2011, the Index averaged 228 points in 2011 - the highest average since FAO started measuring international food prices in 1990. The previous high was in 2008 at 200 points.
FAO relays the decrease was primarily driven by sharp falls in international prices of cereals, sugar and oils due to bumper 2011 crops coupled with slowing demand and a stronger US dollar. Most commodities were affected. Cereal prices registered the biggest decline. In December, the FAO Cereal Price Index decreased 4.8 percent to 218 points. In 2011, the FAO cereal price index averaged 247 points, up 35 percent from 2010 - which was the highest total since the 1970s.
It will be difficult to make any predictions on price trends for the coming months, said Abdolreza Abbassian, FAO senior grains economist.
Source: The Food and Agriculture Organization of the United Nations (FAO)