Despite rising food inflation in Nigeria, caused by increases in prices of bread and cereals, oil and fat and many others. The global Food Price Index continued to drop in December, marking its ninth consecutive monthly decline.
This was disclosed in the Food Price Index report for December 2022 by the Food and Agriculture Organisation of the United Nations (FAO) on Friday.
The index, which records prices of 55 agricultural commodities, averaged 132.4 points in December 2022, down 2.6 points (1.9%) from November.
Continuous Decline: FAO disclosed that the declining index in December was driven by a steep drop in the international prices of vegetable oils together with some declines in cereal and meat prices.
“The FAO Food Price Index(FFPI) averaged 132.4 points in December 2022, down 2.6 points (1.9%) from November, marking the ninth consecutive monthly decline and standing 1.3 points (1.0%) below its value a year ago.
“The decline in the index in December was driven by a steep drop in the international prices of vegetable oils, together with some declines in cereal and meat prices, but partially counterbalanced by moderate increases in those of sugar and dairy. For 2022 as a whole, however, the FFPI averaged 143.7 points, up from 2021 by as much as 18 points, or 14.3%.
Cereal Price Index: Prices of grains also dropped, as ongoing harvests in the southern hemisphere boosted supplies and competition among exporters remained strong
“ It averaged 147.3 points in December, down 2.9 points (1.9%) from November, but still 6.8 points (4.8%) above its December 2021 value.
“Wheat export prices fell in December, as ongoing harvests in the southern hemisphere boosted supplies and competition among exporters remained strong. World maize prices also eased month-on-month, mostly driven by strong competition from Brazil, although concerns over dryness in Argentina provided some support.
“World prices of maize and wheat reached new record highs in 2022, averaging, respectively, 24.8 and 15.6% higher than their 2021 averages, while rice export prices were on average 2.9% above their 2021 levels.
“The increase in the FAO Cereal Price Index in 2022 was due to a host of factors, including significant market disruptions, increased uncertainties, higher energy and input costs, adverse weather in a few key suppliers, and continued strong global food demand.
Meat Price Index: The meat index also dropped for the period as but remained 2.8 points (2.5%) above its year-earlier level.
“Averaged 113.8 points in December, down 1.4 points (1.2%) from November, marking the sixth consecutive monthly decline, but remained 2.8 points (2.5%) above its year-earlier level.
“The decrease in the index in December was driven by lower world prices of bovine and poultry meats, partially counterbalanced by higher pig and ovine meat prices.
“ International prices of bovine meat fell, pressured by a higher supply of slaughter cattle in several large producing countries and lacklustre global demand for medium-term supplies. Meanwhile, poultry meat prices declined, as export availabilities were more than adequate to meet import demand for spot supplies, despite production setbacks due to intensified avian influenza outbreaks.
FAO noted that in 2022 as a whole, the FAO Meat Price Index averaged 118.9 points, up 11.2 points (10.4%) from 2021, marking the highest annual average registered since 1990.
What you should know
Nigeria’s food production capacity was also impacted by heavy rains which destroyed harvests. Food inflation, rose to 24.13% in November 2022 from 23.72% recorded in the previous month. The rise in food inflation was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, food products, and fish.
The “All items less farm produce’’ indices or Core inflation, which excludes the prices of volatile agricultural produce, stood at 18.24% in November 2022 on a year-on-year basis.