Africa: World Food Prices Hit Six-Month Low, UN Agency Reports
Global food prices fell for a fourth consecutive month in July, a sharp decline for grains, oilseeds and dairy products outweighing strong meat and sugar prices, the United Nations agriculture agency reported.
The UN Food and Agriculture Organization's (FAO) Food Price Index, which measures the monthly change in international prices of a basket of 55 food commodities, averaged 203.9 points in July, down 4.4 points or 2.1 percent from June.
"The lingering decline of food prices since March reflects much better expectations over supplies in the current and forthcoming seasons," said FAO senior economist Concepción Calpe.
The FAO Cereal Price Index averaged 185.4 points in July, down 10.7 points or 5.5 percent from June, and as much as 36.9 points or 16.6 percent below the level one year ago.
Lower grain prices "reflected excellent production prospects as well as expected abundant exportable supplies in the 2014/15 marketing season," according to the FAO.
In contrast, rice prices edged marginally higher, on renewed import demand, especially given the drought and subsidy lapse in Thai production.
The FAO Vegetable Oil Price Index averaged 181.1 points in July, down 7.7 points or 4.1 percent from June. The decline continued to be primarily driven by falling soy and palm oil prices, primarily in response to abundant supplies from the United States and South America.
Prices of dairy also fell, albeit temporarily. FAO attributed reduced import demand, including a decline in purchases of butter, by Islamic countries during the holy month of Ramadan.
The FAO Dairy Price Index averaged 226.1 points in July, down 10.3 points or 4.4 percent over June, and down 17.5 points or 7.2 percent from the same period last year.
Meanwhile, meat prices rose for the fifth consecutive month in July, and those for sugar remained firm.
"Livestock product markets have their own dynamics: in the case of meat, beef in particular, many exporting countries are in a herd rebuilding phase, which is limiting availability for exports and sustaining prices," said Mr. Calpe.
A continued strong demand for meat in Asia, and particularly China, helped to edge up the FAO Meat Price Index which averaged 204.8 points in July, 3.7 points or 1.8 percent higher than its revised value in June and 25.4 points or 14.1 percent above the same period last year.
International sugar prices, which have been relatively volatile over the last three months as the world's largest producer, Brazil, grabbles with a drought, and the second largest producer, India, is expected to experience below average monsoon rains.
These factors contributed to a marginal change of 1.1 points or 0.4 percent in the FAO Sugar Price Index, averaging 259.1 points in July. That figure is 20.2 points or 8.4 percent higher than in July 2013.
World Food Prices Drop to Six-Month Low on Grain Supplies
Whitney McFerron Aug 8, 2014 5:27 AM GMT+1200 0 Comments Email Print
Global food prices fell to a six-month low in July as costs for grain tumbled on prospects for ample harvests, the United Nations said.
An index of 55 food items dropped 2.1 percent to 203.9 points from 208.3 points in June, the UN’s Rome-based Food & Agriculture Organization said in an online report today. The agency’s gauge of grain prices slid 5.5 percent from the previous month to the lowest since August 2010. Vegetable oil prices were pegged at the lowest since July 2010, the FAO said.
“We are approaching the harvest period so the danger of having further setbacks is much less,” Concepcion Calpe, a senior economist at the UN FAO, said by telephone today. “This year we feel we are in a rather comfortable situation.”
Prices for corn, soybeans and wheat on the Chicago Board of Trade, the global benchmark, slid in recent weeks to the lowest levels since 2010 as U.S. crops developed in good condition and outlook improved for harvests in Russia and Ukraine. The U.S. Department of Agriculture may forecast next week that corn and soybean production in the U.S., the top grower, will climb to a record, according to a Bloomberg News survey.
Dairy prices in the FAO’s index declined 4.4 percent from June, falling for a fifth month and “reflecting both reduced import demand and abundant export availability,” the agency said on its website. Sugar prices rose 0.4 percent from the prior month amid uncertainty about production in Brazil.
A gauge of meat costs climbed 1.8 percent to 204.8 points, the highest on records dating to 1990, amid tight cattle supplies in Australia as producers rebuild herds as well as strong demand in Asia, according to the report.