New Delhi: Global food prices fell for the fifth straight year in 2016, the UN Food and Agriculture Organisation (FAO) said on Thursday.
In 2016, FAO’s global food price index averaged 161.6 points, 1.5% below the 2015 level, and nearly 30% lower than the 229.9 points recorded in 2011.
“While the prices of sugar and vegetable oils rose significantly in 2016, falling prices in cereal, meat and dairy markets kept the index below its 2015 average," FAO said in a statement.
The FAO Food Price Index tracks monthly and annual changes in international prices for a basket of commodities across five groups—major cereals, vegetable oils, dairy, meat and sugar.
2016 was marked by a steady decline in cereal prices, which fell 9.6% from 2015 and were down 39% from their 2011 peak, the Food and Agriculture Organisation said, adding, sugar and vegetable oil prices rose 34.2% and 11.4%, respectively, over the year.
FAO further said bumper harvests and prospects for staple cereals offset the upward pressure on the food price index from commodities such as sugar and palm oil, where production was impacted by the El Niño weather phenomenon.
“Economic uncertainties, including movements in exchange rates, are likely to influence food markets even more so this year," said Abdolreza Abbassian, senior economist with FAO.
For India, the meltdown in global food prices has meant lower price realization for farmers dependent on export of farm produce.
The value of India’s farm exports fell 22.6% over the past two years, from Rs1.37 trillion in 2013-14 to Rs1.06 trillion in 2015-16, shows data from the Agricultural and Processed Food Products Export Development Authority (APEDA).
Data from APEDA further shows that in the seven months from April to October of 2016-17, India exported Rs59,155 crore worth of farm produce, about 3% lower than the Rs61,023 crore exported during the same period in 2015-16.
“While consecutive droughts in India (in 2014 and 2015) limited the surpluses available for exports, farmers also suffered as the government imposed controls on export of commodities such as sugar and pulses," said Ashok Gulati, agriculture chair professor at the Indian Council for Research in International Economic Relations, Delhi.
“While lower international food prices have helped the government tame food inflation at home, farmers continue to suffer—like now, they are not allowed to export pulses even when prices have fallen below the support prices," Gulati said, adding that “Indian agriculture trade policy continues to be anti-farmer as consumers are vocal to any spike in food prices."