The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.
It consists of the average of five commodity group price indices (representing 55 quotations), weighted with the average export shares of each of the groups for 2002-2004.
The FAO Cereal Price Index averaged 250 in December, down 6 points (2.3 percent) from November. In 2012, the index averaged 241, or 2.4 percent below 2011. After surging over the July to September 2012 period, on production uncertainties and tightening supplies, cereal export quotations dropped because of weaker demand for feed and industrial uses. In December, maize prices fell sharply, as large export supplies in South America relieved pressure from tight availabilities in the United States. Rice prices also dipped in December, on expectation of good harvests, but wheat values changed little under subdued trade activity.
The FAO Meat Price Index averaged 176 in December, down marginally from November. Quotations of all meat categories remained close to their November level, except pig meat, which fell by 3 points (2.0 percent). The Index averaged 175 points in 2012, the second highest annual value after 2011 when it averaged 177 points. The most notable price change in 2012 was a fall of 8.3 percent in the index for ovine meat from the 2011 record. Overall, the meat sector has had to focus on productivity gains, as increased feed costs have not been associated with higher product prices.