What the FAO Food Price Index can—and cannot—tell shoppers

Original Afrikons explanatory text based on FAO methodology. Afrikons summary; external journalists retain their original affiliations.

The FAO Food Price Index measures monthly changes in international prices for a basket of food commodities. It is a benchmark for global markets, rather than the total bill paid by a household at a particular shop.

Its headline combines five groups: cereals, vegetable oils, dairy, meat and sugar. FAO weights the group indices using their average export shares during 2014–2016. That trade-based construction is different from building an index around the exact mix of products a household buys.

The headline can also conceal differences between groups. An increase in one component and a decline in another feed into the combined figure according to their weights. Reading the components is therefore part of understanding the overall movement.

For national retail and wholesale food prices, FAO points users to its separate Food Price Monitoring and Analysis tool. The global index is useful context for a local affordability story, but evidence from the relevant country and market is needed to describe the prices shoppers actually face.