Global Food Price Index Down 1.5% MoM... Sugar Plummets 16.6%

Grain Prices Turn Up Amid Rising Tensions in the Black Sea Region

In December last year, global food prices were reported to have declined. In particular, sugar prices fell by more than 16%. On the other hand, grain prices rose amid escalating international tensions in the Black Sea region.

According to the Ministry of Agriculture, Food and Rural Affairs on the 6th, the Food and Agriculture Organization (FAO) announced that the global food price index for December 2023 recorded 118.5 points, down 1.5% from the previous month. By product group, prices of oils, meat, and sugar decreased, while prices of grains and dairy products increased.

Last month, the price inflation rates of sugar and salt simultaneously reached their highest levels in a year, and on the 11th, sugar was displayed at Yangjae Hanaro Mart in Seoul. Photo by Jinhyung Kang aymsdream@

The sugar price index was 134.6 points, down 16.6% from 161.4 points the previous month. A ministry official explained, "The main reason for the sharp drop in sugar prices in December was the favorable weather conditions in Brazil, which accelerated production," adding, "The expansion of sugar exports due to poor ethanol sales revenue in Brazil and the Indian government's restrictions on using sugarcane for ethanol production also influenced the decline in sugar prices."

The oils price index was 122.4 points, down 1.4% from 124.1 points the previous month. This was due to generally weak demand from major importing countries across all oils, including palm oil, soybean oil, rapeseed oil, and sunflower oil. In particular, soybean oil prices fell as biodiesel-related demand slowed and weather conditions improved in Brazil's main production areas.

The meat price index was 110.4 points, down 1.0% from 111.5 points the previous month. Pork prices declined due to continued weak import demand in the Asian region, while beef and poultry prices also fell as demand decreased in Asia and export volumes from major producing countries were sufficiently supplied.

Conversely, the grain price index rose 1.5% from 121.0 points the previous month to 122.8 points, marking an upward turn. This was mainly attributed to logistical disruptions caused by weather conditions in major exporting countries, escalating international tensions in the Black Sea region, and strong demand for wheat. Corn prices also increased due to concerns over crop conditions in Brazil and deteriorating logistics in Ukraine. International rice prices rose mainly for Indica varieties, driven by export restrictions in India and supply shortages in Vietnam.

The dairy price index increased 1.6% from 114.2 points the previous month to 116.1 points. The rise in butter and cheese prices was mainly due to increased domestic sales during the winter holiday season in Western Europe, insufficient supply, and growing cheese import demand in the Middle East. Whole milk powder also saw increased import demand, while skimmed milk powder prices fell due to weak demand.

Price Index by Item.