In 2021, the FAO food price index hit a ten-year high. The FAO food price index averaged 133.7 points in December 2021, with a month on month decrease of 1.2 points (0.9%) and a year-on-year increase of 25.1 points (23.1%). In December, except dairy products, the values of all sub indexes of FAO food price index decreased month on month, and the prices of international vegetable oil and sugar fell sharply month on month. However, for the whole year, the average food price index of FAO in 2021 was 125.7 points, 27.6 points (28.1%) higher than that of the previous year, and all sub indexes were significantly higher than that of the previous year.
Wheat fell month on month, corn remained strong and rice loosened. After the southern hemisphere grain harvest in December, supply improved, demand slowed down and wheat export prices fell. Partly affected by the wheat market, the barley quotation also decreased slightly in December. However, throughout the year, due to strong demand and tight supply, especially the tight supply of high-quality wheat in major exporting countries, wheat prices were at a historical high in 2021, with a year-on-year increase of 31.3%. Corn prices remained strong in December. On the one hand, affected by strong demand, prices remained high. On the other hand, the market was worried about the continued drought in Brazil. In 2021, corn prices rose by 44.1% year-on-year. In contrast, rice was the only major grain whose price fell in 2021, down 4% year-on-year. In December, with weak demand and the devaluation of currencies of major suppliers against the US dollar, international rice prices eased.
Palm oil and sunflower seed oil fell slightly, while soybean oil and rapeseed oil remained strong. The FAO vegetable oil price index averaged 178.5 points in December, down 6.1 points (3.3%) from the recent record high. Among them, the prices of palm oil and sunflower oil weakened, and the prices of soybean oil and rapeseed oil remained basically unchanged month on month. International palm oil prices fell in December, mainly due to the increase of covid-19 cases and the weakening of global import demand. At the same time, affected by the quantitative rationing of demand, the international sunflower oil quotation weakened. In contrast, soybean oil prices remained strong due to strong import demand dominated by India. In addition, the price of rapeseed oil also remained high due to the continuous shortage of global supply. In 2021, the FAO vegetable oil price index averaged 164.8 points, an increase of 65.4 points (65.8%) year-on-year, a record high.
Sugar prices fell month on month. The FAO sugar price index averaged 116.4 points in December, down 3.8 points (3.1%) month on month, a five month low. Under the influence of Omicron mutant strain, many regions resumed epidemic control measures, which had an impact on global sugar demand. The depreciation of the Brazilian real against the US dollar and the decline in ethanol prices also contributed to the decline in world sugar prices in December. Throughout the year, the FAO sugar price index averaged 109.3 points, up 29.8 points (37.5%) year-on-year, the highest since 2016. The increase in global sugar demand combined with the reduction in production in Brazil supported the rise in sugar prices.
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