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Benedicte Gravrand, Opalesque Geneva:
The FAO Food Price Index (FFPI) averaged 211 points in December 2011, 2.4% down from November and 11.3% below its February 2011 peak. The December decline was due to sharp falls in international prices of cereals, sugar and oils. Bumper crops coupled with slowing demand and a stronger US dollar weighed on prices of most commodities, said the Food and Agriculture Organisation (FAO), the United Nations’ food agency.
In spite of some weakening during H2, the FFPI averaged 228 points in 2011, 23% more than in 2010, exceeding the previous high of 200 points in 2008 and the highest level (in both nominal and real terms) since FAO started measuring international food prices beginning in 1990.
Jose Graziano da Silva, the new head of FAO said earlier this month he expects food prices to stay volatile in 2012 — and more people to go hungry.
Meanwhile, most agricultural indices were down in 2011 - a case of backwardation. As at December 30th, the Dow Jones UBS Agriculture subindex (which tracks futures) was down 14% YTD. It had been up 38% in 2010, and up 5.6% in the last 10 years. The Grains subindex did not fare as well, with -14% in 2011, but +30% in 2010, and +4% in the last 10 years. And the Livestock subindex returned -2% in 2011, +9% in ...................... To view our full article Click here
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