FAO Food Price Index
The FAO Food Price Index (FFPI) is a food - price index of the Food and Agriculture Organization (FAO) of the United Nations . It records the development of world market prices for 55 agricultural raw materials and foods.
concept
The trade-weighted FAO Food Price Index is technically a price index and is calculated using the Laspeyres formula. It documents the development of world market prices of 55 agricultural commodities and foodstuffs in US dollars . The food and agriculture organization (FAO) of the United Nations grouped the food into five product groups (meat, dairy products, cereals, oils and fats as well as sugar).
When calculating the price index according to Étienne Laspeyres , the selected weights (i.e. the consumption quantities) come from the base year. The reference period from 2002 to 2004 (index value 100) serves as the basis. The index determines the price of the product groups in the composition of the base year at goods prices of the reporting year based on the price of the same product groups (same consumption quantities) at goods prices of the base year. The FAO calculates five sub-indices from all data, which together make up the overall index.
The FAO Food Price Index is published every first Thursday of the month.
composition
The overall index consists of the following five sub-indices:
- Meat Price Index (meat price index)
- Dairy Price Index (price index for dairy products)
- Cereals Price Index
- Oils Price Index (price index for oils and fats)
- Sugar Price Index
Inflation indicator
The FAO Food Price Index (FFPI) is an indicator of the future development of inflation or the development of costs in the food industry . In the event of a trend reversal in the market for agricultural commodities, it is a good leading indicator for the bond market , since agricultural commodities tend to have a lead of three to six months compared to bonds . There is a close temporal connection between the interest on bonds and the prices for agricultural commodities.
Connections between the FFPI and the geometrically weighted US dollar index and the trade-weighted Trade Weighted US dollar index can be identified. A falling US dollar is synonymous with inflationary tendencies and rising raw material prices. For Europeans it is exactly the opposite. A strong US dollar leads to a weak euro (see Euro Currency Index and Euro Effective Exchange Rate Index ). In terms of the links between the markets, this means that agricultural commodity prices and the euro are synchronized.
history
Historical overview
The FAO Food Price Index (FFPI) started in January 1990 at a nominal 106.9 points. By May 1996 it had increased by 28.4 percent to 137.3 points. In May 2002 the index hit an all-time low of 85.2 points.
In 2007 and 2008, important staple foods , especially rice , maize and wheat, rose dramatically in price. They are triggered by a bundling of several factors (drought in grain-producing countries, rise in oil prices , use of biofuels , speculation and commodity futures , possible climate changes , export bans, decreasing stocks). The underlying causes of this worldwide rise in prices are still being debated. During the food price crisis in 2007-2008 , the FFPI rose in June 2008 to a record level of 224.4 points. Since the low of May 2002, that means an increase of 163.4 percent. As a result of high world market prices, revolts broke out in many developing countries .
In the course of the international financial crisis , which started in the US housing crisis in 2007, the food price index fell. In February 2009 the low was 141.3 points. The decrease since June 2008 is 37.0 percent. On the world market for food, similarly large fluctuations in price formation can now be observed as are known from stocks.
In February 2011 the FFPI reached an all-time high with a nominal 237.9 points and was thus above the level of June 2008 on average. Adjusted for inflation , the index also marked a high. World market prices rose by 35.1 percent within a year. Since the all-time low of May 2002, the increase has been 179.2 percent. Several factors are named as reasons for the increase (increasing world population , growing money supply , speculation on the agricultural markets, crop failures due to natural disasters , export restrictions of some countries). The consequences of high food prices are an increase in inflation and unrest in parts of the world.
In the period from 1992 to 2012, world market prices for agricultural raw materials and food rose on average by a nominal 4.8 percent per year. In real terms, i.e. adjusted for inflation, growth in the same period was 1.7 percent annually. From 2002 to 2012, global inflation averaged 13.5 percent annually. In real terms, the rise in food prices over the same period was 4.5 percent per year. Global inflation between 2007 and 2012 averaged 6.7 percent in nominal terms and 2.1 percent in real terms.
Annual development
The table shows the annual high, low and closing levels of the FAO Food Price Index since 1990. The annual price development is also shown in percent. For all data, it should be noted that these refer to the nominal prices in US dollars for the respective survey period, i.e. are not adjusted for inflation.
| year | Peak | Lowest point | Final stand | Change in% |
Annual average |
Change in% |
|---|---|---|---|---|---|---|
| 1990 | 112.8 | 100.9 | 103.9 | 105.4 | ||
| 1991 | 108.9 | 99.5 | 108.8 | 4.7 | 103.6 | −1.7 |
| 1992 | 111.9 | 103.9 | 103.9 | −4.5 | 108.5 | 4.7 |
| 1993 | 107.9 | 101.3 | 107.9 | 3.8 | 104.6 | −3.6 |
| 1994 | 118.5 | 105.3 | 118.5 | 9.8 | 110.6 | 5.7 |
| 1995 | 129.1 | 118.2 | 126.8 | 7.0 | 123.2 | 11.4 |
| 1996 | 137.3 | 119.7 | 119.7 | −5.6 | 129.1 | 4.8 |
| 1997 | 122.4 | 115.1 | 115.1 | −3.8 | 118.5 | −8.2 |
| 1998 | 113.6 | 101.2 | 102.6 | −10.9 | 107.1 | −9.6 |
| 1999 | 101.1 | 88.4 | 88.5 | −13.7 | 92.4 | −13.7 |
| 2000 | 94.4 | 87.8 | 94.4 | 6.7 | 90.4 | −2.2 |
| 2001 | 95.5 | 91.7 | 92.2 | −2.3 | 93.4 | 3.3 |
| 2002 | 95.1 | 85.2 | 94.6 | 2.6 | 89.9 | −3.7 |
| 2003 | 105.3 | 94.5 | 105.3 | 11.3 | 97.7 | 8.7 |
| 2004 | 114.4 | 108.5 | 114.4 | 8.6 | 112.4 | 15.0 |
| 2005 | 121.5 | 114.2 | 121.5 | 6.2 | 117.3 | 4.4 |
| 2006 | 134.5 | 121.2 | 134.5 | 10.7 | 126.7 | 8.0 |
| 2007 | 191.0 | 134.0 | 191.0 | 42.0 | 158.7 | 25.3 |
| 2008 | 224.4 | 148.1 | 148.1 | −22.5 | 199.8 | 25.9 |
| 2009 | 178.1 | 141.3 | 178.1 | 20.3 | 156.9 | −21.5 |
| 2010 | 223.3 | 168.2 | 223.3 | 25.4 | 185.3 | 18.1 |
| 2011 | 237.9 | 210.8 | 210.8 | −5.6 | 227.6 | 22.8 |
| 2012¹ | 216.0 | 200.4 | 209.3 | −0.7 | 211.6 | −7.0 |
¹ December 31, 2012
See also
- Continuous Commodity Index
- Dow Jones-UBS Commodity Index
- Rogers International Commodity Index
- S&P GSCI
- Thomson Reuters / Jefferies CRB Index
Web links
Individual evidence
- ↑ Sentix: Technical Intermarket Analysis ( Memento from December 16, 2005 in the Internet Archive ) (PDF; 294 kB)
- ↑ Federal Ministry of Food, Agriculture and Consumer Protection: Global Food Security through Sustainable Development and Agriculture ( Memento of the original from February 13, 2011 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , dated May 28, 2008
- ↑ Die Presse: SuperMarkt: Hunger for the printing press , from January 29, 2011
- ↑ Handelsblatt: Food prices at record levels , March 3, 2011
- ↑ a b Food and Agriculture Organization: Nominal price development ( MS Excel ; 95 kB)
- ↑ Food and Agriculture Organization: Real price development ( Memento of the original from February 6, 2011 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. ( MS Excel ; 95 kB)
