Global food prices dropped by 2.4% in December 2011 as compared to November on the back of fall in rates of cereals, sugar and oils.
At its new level of 211 points, the Index was 11.3% (27 points) below its peak in February 2011.
Decline was driven by sharp falls in international prices of cereals, sugar and oils due to bumper 2011 crops coupled with slowing demand and a stronger US dollar, a statement from UN body Food and Agriculture Organisation (FAO) said.
It said that most commodities were affected.
Commenting on the new figures, FAO Senior Grains Economist Abdolreza Abbassian said it was difficult to make any firm prediction on price trends for the coming months.
"International prices of many food commodities have declined in recent months, but given the uncertainties over the global economy, currency and energy markets, unpredictable prospects lie ahead," Abbassian said.
Among the principal commodities, cereal prices registered the biggest fall, with the cereal price index dropping 4.8% to 218 points in December.
Record crops and an improved supply outlook sent prices of major cereals declining significantly. Maize prices fell 6%, wheat 4% and rice 3%.
The Oils and Fats price index stood at 227 points in December, down 3% from November and well below the level of 264 points one-year ago.
Larger than expected overall supplies of vegetable oil led to a rise in stocks (notably palm and sunflower oil), which, together with poor global demand for soybeans, deflated prices.
The Meat price index averaged 179 points, slightly down compared with November. The decline was mainly driven by pig meat, whose price dropped by 2.2%, with sheep meat also receding somewhat. By contrast, poultry and bovine meat prices recorded mild gains.
Dairy price index averaged 202 points, almost unchanged from November.
The Sugar price index declined for the fifth consecutive month to 327 points in December, down 4% from November and 18% from its July 2011 peak.
The Index’s weakness in recent months mostly reflects expectations of a large world production surplus over the new season, on the back of good harvests in India, the European Union, Thailand and Russia.
