In a news release, the UN Food and Agriculture Organization (FAO) said its most recent Food Price Index dropped 1.1 per cent from November. The decline from 213 to 209 points was largely due to the continuing decrease in the international prices of cereals, oils and fats.

The Index measures the monthly change in international prices of a basket of 55 food commodities, including meat, dairy, sugar, and cereals. The prices for cereals also increased slightly, while sugar and oils prices fell.

“The result marks a reversal from the situation last July, when sharply rising prices prompted fears of a new food crisis,” said the Assistant Director-General in charge of FAO’s Economic and Social Development Department, Jomo Sundaram.

“But international coordination, including through the Agricultural Market Information System (AMIS), 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 added.

According to its website, the AMIS initiative – for which the Secretariat is based at FAO Headquarters in Rome, Italy – seeks to enhance food market transparency and encourage coordination of policy action in response to market uncertainty, mainly focusing on four foods that are particularly important in international markets: wheat, maize, rice and soybeans.

As a whole, the Index averaged 212 points in 2012, seven per cent less than in 2011. The sharpest falls in prices were registered in sugars, dairy products and oils, and to a lesser extent in cereals and meat.

From July to September, cereal prices had steadily increased due to uncertainties and tight supplies. However, they began dropping in October because of weaker demand for supplies in industrial uses.

In December, maize prices fell sharply as large export supplies in South America relieved market pressure. Rice prices also dipped last month due to the expectations of good harvests, but wheat values remained virtually unchanged.

Oils and fats prices experienced a 1.9 per cent drop mainly due to the continued build up of large global inventories of palm oil, and sugar prices decreased only marginally. FAO noted that an increase in global sugar production, especially in Brazil, kept international prices down for much of the second half of 2012.

Meat prices registered a slight decrease as pig prices fell by 2 per cent, the agency stated, while dairy prices rose by 0.9 per cent – they were the only commodities to have experienced a rise in price as the dairy market is increasingly susceptible to supply changes related to pasture conditions, feed availability and affordability.

The Food and Agriculture Organization’s (FAO) monthly Food Price Index rose six per cent in July, mostly driven by a surge in grain and sugar prices, and averaged 213 points, up 12 points from June.

The index measures the monthly change in international prices of a basket of 55 food commodities, including meat, dairy, sugar, and cereals.

According to FAO, the severe deterioration of maize crop prospects in the United States, following extensive drought damage, pushed up maize prices by almost 23 per cent in July.

International wheat quotations also increased, experiencing a 19 per cent surge due to low expectations of production in Russia, coupled with the prospects of high demand for wheat because of tight maize supplies. However, international prices for rice remained mostly unchanged.

Untimely rains in Brazil – the world’s largest sugar exporter – largely caused the price of sugar to increase by 12 per cent, and concerns over India’s delayed monsoon and poor rains in Australia also contributed to the rebound in price.

In contrast, the prices for meat and dairy products experienced little change. Average meat prices decreased by 1.7 per cent in July, falling for the third consecutive month, while average dairy prices remained unchanged from June, after five straight months of decline.

The session, known as UNCTAD XIII, is the first ministerial conference on trade and development since the fallout from the 2007-2008 global economic crisis. The sessions are held every four years, and the theme of this year’s session is ‘Development-centred globalization: Towards inclusive and sustainable growth and development.’

According to the report, mounting financial speculation in commodities and the increasing diversion of agricultural land to biofuel crops has changed the forces underpinning commodity prices, pushing them through a sustained period of increase.

What should be a benefit for poor nations, especially the globe’s 48 least developed countries – whose economies often depend heavily on commodity exports – is on balance a negative development because many of these countries are net importers of oil and staple foods.

Since the food crisis of 2008, prices for basic nourishment have been both volatile and high, the report notes – and poor families are acutely vulnerable, as they typically spend 50 per cent or more of their incomes on food.

The report’s recommendations include that steps be taken to invest in national and regional food reserves to help food-insecure countries; the recent shift to ‘finance-driven globalization,’ as it applies to commodities, should be reconsidered; fiscal and taxation policies should be adjusted so that they help developing countries reap stable, long-term economic benefits from commodities exports; and measures should be taken nationally and internationally to improve the situations of small farmers and other small commodity producers in poor countries.

UNCTAD XIII was officially opened over the weekend. Addressing the opening ceremony on Saturday, the Deputy Secretary-General, Rose Asha-Migiro, said it was appropriate that the conference was taking place in the Arab world, “where rapid political transformations are creating new job opportunities for development.”

“The recent unrest in the Arab world has shown that a lack of economic opportunity and political voice, particularly among youth, is not sustainable,” she said. “Indeed, growing awareness of social injustice and inequality has also led to protests in several advanced countries.”

The Deputy Secretary-General noted that UNCTAD XIII provided an opportunity to address five principal challenges: identifying measures needed to restore growth in the global economy; examining the causes of the crisis, especially those of a systemic nature, and identify measures to prevent its recurrence; identifying trade and developments policies that support efforts to mitigate climate change; making globalization more inclusive; and, lastly, unlocking the full potential of international business.

“UNCTAD’s universal membership, combined with its broad mandate covering trade, finance, investment, technology and sustainable development, make UNCTAD XIII a timely forum to chart the way forward,” Ms. Migiro said. “A failure at this juncture could lead to a loss of trust, and undermine the legitimacy of globalization and its development promise.  Much is at stake.”

Addressing UNCTAD XIII on Sunday, the President of the General Assembly, Nassir Abdulaziz Al-Nasser, said UNCTAD had, throughout its existence, closely reflected the concerns of the majority of the Assembly’s membership in the area of development – with that majority of nations also representing the vast majority of the world’s population, and with most of those hailing from developing countries.

“I am here today to reaffirm and renew our shared commitment to the special role that UNCTAD has played – and must continue to play – in giving voice and support to the most urgent needs of the developing nations,” the Assembly President said. “The interests of the most developed countries are also addressed when we recall the importance of South-South and triangular cooperation in the area of development.”