World food costs slipped for a second month in November as prices for oilseeds and cooking oils as well as sugar fell to the lowest in two years, the United Nations’ Food & Agriculture Organization said.
An index of 55 food items tracked by the FAO fell to 210.9 points from a restated 214.1 in October, the Rome-based agency wrote in an e-mailed report today. The cost of oils and fats remained near the lowest since September 2010.
Palm oil futures have dropped 24 percent since the end of August as reserves increased in Indonesia and Malaysia, the biggest producers, weighing on oil-crop prices. Use of the oil is expected to climb to compensate for a shortage of other vegetable oils, according to Hamburg-based researcher Oil World.
“The main driving factor remains abundant palm oil production, which, combined with weak world import demand, has led to further build-ups in inventories,” the FAO wrote in today’s report. “Except for dairy, international prices of all the commodity groups included in the index fell in November.”
The global food-import bill may fall 9.7 percent this year to $1.14 trillion from a record $1.26 trillion in 2011 on lower costs for freight and reduced spending on vegetables and fruits, grains and sugar, the FAO forecast last month.
The November index for fats and oils dropped to 200.4 points from 206.4 the previous month, to the lowest level since September 2010, the FAO reported. Palm oil futures in Malaysia dropped 5.1 percent last month, while Chicago soybeans declined 7.1 percent.
The FAO’s gauge of world grain prices declined to 255.6 points from 259.5. Wheat prices fell as concerns about an imminent export restriction by Ukraine receded, according to the FAO.
The index of sugar prices dropped to 274.4 points from 288.2 points in October, to the lowest level since August 2010. The FAO dairy-price index rose to 195 points from 194 in October, the highest level since March, the data showed. The index for meat prices dropped to 174.7 points from 176.
World grain production may drop to 2.28 billion metric tons this year from 2.35 billion tons the previous season, the FAO wrote in a separate report. The outlook was cut by 2.3 million tons from a month ago on reduced estimates for the global wheat harvest.
Grain consumption is forecast to slip to 2.31 billion tons from 2.32 billion tons, while global grain stocks are predicted to fall to 494.7 million tons at the end of the 2012-13 season from 519.5 million tons a year earlier. The outlook for ending stocks was cut by 2.7 million tons.
Farmers across the world may harvest 659.4 million tons of wheat in 2012 from 699.4 million tons last year, the FAO said, cutting its estimate by 1.8 million tons.
The world crop of coarse grains, including corn and barley, may slip to 1.14 billion tons from 1.17 billion tons a year earlier, while rice production is expected to increase in 2012-13 to 486.8 million tons from 482.7 million tons.