The World Food Index has seen a continuous increase in the past few years, suggesting food price hikes with every single year. The index averaged 107.5 points in December 2020 which marked seven months of constant rise.
Fao Food Price Index [FFPI] - Key Facts
The Fao Food Price Index [FFPI] was introduced in 1996 to help monitor the changes in the global commodity markets. It is a measure of the month-by-month fluctuation in the prices of food items.
It records the monthly changes in the global prices of a basket of commodities. It is generally an average of five commodity groups - sugar, vegetable oils, cereals, meat, and dairy. The index uses these commodities to calculate FFPI because of their strategic significance in international trade and food security.
How Is The Fao Food Price Index [FFPI] Determined?
The Fao Food Price Index [FFPI] is determined as an average of the price indices of the commodity groups in relation to their export shares over the base period between 2014 and 2016. The Food and Agriculture Organization (FAO) is an agency of the United Nations responsible for leading global efforts to fight hunger.
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Significance Of Fao Food Price Index [FFPI]
16th October is celebrated every year as World Food Day around the world to mark the founding day of FAO which was in 1945. India had released a 75 rupees coin in commemoration of the FAO to mark the 75th anniversary of the agency.
The Fao Food Price Index [FFPI] reached a new high in March 2022 which is about 12% more than the previous month as supply was reduced due to the war and fertilizer and energy costs continue to rise. The biggest price increase was reported for cereals because of a spike in wheat prices and the meat index hit an all-time.
Fao Food Price Index [FFPI] - Pandemic Highlights
In 2021, the Fao Food Price Index [FFPI] averaged 127 points which were about 40% higher than the previous year. In 2022, the index averaged 159.3 points to break the previous high of 137.6 in 2011. This index has particularly become volatile in the past two years due to the pandemic and other factors like the present war condition.
The pandemic-related restrictions across countries had caused the destruction of demand due to which the index fell to an extreme low in May 2020. However, as restrictions were lifted and demand increased, supply chain disruptions were seen again.
Owing to the tension in the Black Sea areas, supply shortages worsened, and the Fao Food Price Index [FFPI] rose by over 17% in early 2021, reaching a new high which was considered to be the highest spike in the prices since 2010. Such a rise can be associated with a sudden hike in the prices of cereals, sugar, and vegetable oils.
FAQs on Fao Food Price Index [FFPI]
Q1) What is GIAHS and how is it related to Fao Food Price Index [FFPI]?
The Globally Important Agricultural Heritage Systems (GIAHS) is an initiative established by the FAO to protect the agricultural heritage systems. This remains one of the most influential initiatives by the FAO, apart from the Fao Food Price Index [FFPI].
Q2) Who releases the Fao Food Price Index [FFPI]?
The Fao Food Price Index [FFPI] is released by the FAO (Food and Agriculture Organization).
Q3) When was Fao Food Price Index [FFPI] introduced?
The Fao Food Price Index [FFPI] was introduced in 1996 and remains one of the most influential initiatives by the Food and Agriculture Organization.
Q4) When is the Fao Food Price Index [FFPI] released?
Fao Food Price Index [FFPI] is released on the first Thursday of every month.
Q5) What is the Base Year for the Fao Food Price Index [FFPI]?
Since its introduction, the Fao Food Price Index [FFPI] used 1996 as its base year, but the base year was moved to 2002-2004 in the year 2009, to reflect the most recent prices.