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Global food prices drop 7% in 2012

Jan 10 2013 14:52

Rome - Global food prices fell by 7% in 2012 from the level the previous year, the UN's Food and Agriculture Organisation said on Thursday, assuaging worries a few months ago that the world could be heading for a food crisis.

The FAO added that prices had fallen in December for the third month in a row.

The Rome-based FAO's Food Price Index averaged 212 points in 2012, a drop of 7% owing largely to falls in the prices of sugar, dairy products and oil.

According to the FAO's index, a monthly measure of changes in a basket of food commodities, prices dropped in December by 1.1% to 209 points, down for the third month from the 263 points registered in August.

"The result marks a reversal from the situation last July, when sharply rising prices prompted fears of a new food crisis," said Jomo Sundaram from FAO's Economic and Social Development Department.

"But international coordination...as well as flagging demand in a stagnant international economy, helped ensure the price spike was short-lived and calmed markets so that 2012 prices ended up below the previous year’s levels," he said.

The sharpest declines registered in 2012 were sugar (17.1%), dairy products (14.5%) and oils (10.7%), while price declines were much more modest for cereals (2.4%) and meat (1.1%).

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