September 8, 2017

Sharp fall in wheat prices drive global food prices down in Aug.

A sharp fall in wheat prices largely drove the global food prices to dip in August, according to the UN Food and Agriculture Organisation.

The FAO food price index-a monthly trade-weighted index tracking international market prices of five major food commodity groups-declined 1.3% to an average of 176.6 points in August from July's 179.1 points.

The FAO cereal price index dropped 5.4%, reflecting a substantial decline in wheat prices due to improved outlook for production in the Black Sea region. FAO raised its forecast for global cereal production to 2.611 million tonnes, an all-time record. Worldwide stocks of cereals are also expected to reach an all-time high by the close of seasons in 2018, according to the latest FAO Cereal Supply and Demand Brief, which was released on Thursday (Sept.7).

FAO's new forecast projects that the utilisation of coarse grains for animal feed will also reach an all-time high.

The meat price index also dropped, by 1.2% in the month, while that for dairy rose 1.4% from July, led by greater demand for butterfat in Europe and North America.

The other FAO price indices were for vegetable oil, which rose 2.5% from July, and sugar, which slipped by 1.7%.