Weak demand for vegetable oils, such as sunflower oil and olive oil, and beef caused the food price index to fall in December. Dairy and sugar, on the other hand, became more expensive. Despite the decline, food prices are still well above their average over the past ten years.

In addition, prices were already high at the end of 2021 due to disappointing harvests and high demand for agricultural products from China, among others. For the whole of 2022, the food price index was therefore on average 14 percent higher than the previous year. High food prices, in addition to higher energy bills, contributed to the sharp rise in inflation. Famines are also on the rise.

Food prices fluctuated sharply last year. In March last year, prices shot up after the Russian invasion of Ukraine. That was because those two countries are major suppliers of grains and oils. Thanks to the so-called grain deal between Russia and Ukraine, led by the UN and Turkey, grain exports via the Black Sea started again and prices fell.

However, the drop in the food price index does not mean that food in the supermarket will also become cheaper. This is because the gauge tracks shifts in raw material costs and it takes time for changes to feed through to retail prices. In addition, supermarket prices have also been influenced by more expensive energy and labor costs.

The outlook for 2023 depends mainly on weather conditions, according to the FAO. For example, large growers had to deal with drought, flooding and frost last year. The war in Ukraine, which has lasted almost a year, is also weighing on the finances of Ukrainian farmers and forcing them to leave areas of land uncultivated.