FAO Food Price Index (FFPI)
Kartavya Desk Staff
Source: FAO
Context: The FAO Food Price Index (FFPI) for July 2025 rose to 130.1 points, its highest in over two years, driven by record meat prices and a surge in vegetable oil prices, despite declines in cereals, dairy, and sugar.
About FAO Food Price Index (FFPI):
• What it is? A monthly measure of changes in international prices of a basket of key food commodities. Published by the Food and Agriculture Organization (FAO) of the United Nations.
• A monthly measure of changes in international prices of a basket of key food commodities.
• Published by the Food and Agriculture Organization (FAO) of the United Nations.
• Launched in: First introduced in 1996
• Methodology revised in July 2020 to update the base period and expand coverage.
• Aim: To serve as a global benchmark for monitoring food price trends and market volatility. Supports policymakers, researchers, and market participants in agricultural planning and food security assessments.
• To serve as a global benchmark for monitoring food price trends and market volatility.
• Supports policymakers, researchers, and market participants in agricultural planning and food security assessments.
• Criteria Used: Tracks five commodity groups: cereals, vegetable oils, dairy, meat, and sugar. Uses average export shares from 2014–2016 as weights in the composite index.
• Tracks five commodity groups: cereals, vegetable oils, dairy, meat, and sugar.
• Uses average export shares from 2014–2016 as weights in the composite index.
• Methodology: Based on international export prices rather than domestic retail/wholesale prices. Combines nominal and real price indices for comparative analysis over time. Prices are sourced from global trade data and updated monthly.
• Based on international export prices rather than domestic retail/wholesale prices.
• Combines nominal and real price indices for comparative analysis over time.
• Prices are sourced from global trade data and updated monthly.
• Key Features: Commodity-Specific Indices – Separate indices for cereals, vegetable oils, dairy, meat, and sugar. Global Benchmark – Widely used by governments, financial institutions, and food security agencies. Market Insight – Highlights drivers such as weather, policy changes, global demand-supply dynamics, and geopolitical events. Policy Relevance – Helps assess inflationary pressures, trade policy needs, and humanitarian response strategies.
• Commodity-Specific Indices – Separate indices for cereals, vegetable oils, dairy, meat, and sugar.
• Global Benchmark – Widely used by governments, financial institutions, and food security agencies.
• Market Insight – Highlights drivers such as weather, policy changes, global demand-supply dynamics, and geopolitical events.
• Policy Relevance – Helps assess inflationary pressures, trade policy needs, and humanitarian response strategies.
NOTE: Don’t worry about the data in this report, as it’s a monthly report and keeps changing. From an exam perspective, focus on understanding the basics of the index.