August 8, 2014

World food prices fall 2.1% in July 2014: FAO

A significant drop in global rates of grains have send international food prices falling by 2.1% during July 2014 compared to previous month's record, the Food and Agriculture Organization of the United Nations (FAO) reported.

World food rices, measured on the FAO's food index, fell for a fourth consecutive month in July. The index averaged at 203.9 points, down by 2.1% from June 2014, and 3.5% below July 2013.

The FAO price index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar.

"While meat prices rose for the fifth consecutive month and sugar remained firm, sharp declines in grains, oilseeds and dairy quotations pushed down the FAO Food Price Index to its lowest level since January 2014," the FAO said.

According to the organisation, the recent sharp slide in cereal prices reflected significant fall in international prices of corn and wheat, a reaction to excellent production prospects in major producing countries.

In the meantime, soy oil prices have fallen mainly in response to record crop prospects for the US as well as abundant availabilities in South America. Prices for rapeseed also weakened, reflecting ample crop prospects for 2014-15.

Dairy products prices are on a continual drop reflecting both reduced import demand and abundant export availability. However, meat prices saw a rise in July.