World food prices continue to fall

Global food commodity prices fell in July for the second consecutive month, led by cereals, vegetable oil and dairy, said the Food and Agriculture Organisation (FAO).

The specialised agency of the United Nations made the disclosure in its Food Price Index on Thursday.

The Index, which was prepared based on prices of globally traded food items, averaged 123 points in July, down 1.2 per cent from June but still 31.0 per cent higher than its level in the same period last year.

According to the report, the July drop reflected declines in the quotations for most cereals and vegetable oils as well as dairy products.

The FAO Cereal Price Index was 3.0 per cent lower in July than in June, pushed down by a 6 per cent month-on-month drop in international maize prices.

Prices of other coarse grains such as barley and sorghum also dropped significantly, reflecting weaker import demand.

However, wheat quotations edged 1.8 per cent higher in July reaching their highest level since mid-2014 in part due to concerns over dry weather and crop conditions in North America.

At the same time, international rice prices hit two-year lows, impacted by currency movements and a slow pace of sales caused by high freight costs and logistical hurdles.

The FAO Dairy Price Index declined 2.8 per cent from June, impacted by slower market activity in the Northern Hemisphere due to ongoing summer holidays, with skim milk powder registering the largest drop, followed by butter, whole milk powder and

cheese.

Meanwhile, the FAO Vegetable Oil Price Index reached a five-month low, declining 1.4 per cent from June, as lower prices for soy, rape and sunflower seed oils more than offset rising palm oil values.

In contrast, the FAO Sugar Price Index increased by 1.7 per cent in July. The rise was mostly related to firmer crude oil prices as well as uncertainties over the impact of recent frosts on yields in Brazil, the world’s largest sugar exporter, while good production prospects in India prevented a larger jump.

The FAO Meat Price Index rose marginally from June, with quotations for poultry meat rising the most due to increased imports by East Asia and limited production expansions in some regions.

Meanwhile, pig meat prices fell, following a decline in imports by China.