March 7 (Bloomberg) -- World food prices were stable in February for a second month, as increasing dairy and cooking oil costs were compensated by declines in grains and sugar, the United Nations’ Food & Agriculture Organization said.
An index of 55 food items tracked by the FAO was at 210.2 points last month, little changed from 210.4 points in January, the Rome-based FAO wrote in an online report. The index has moved within a 0.6-point range in the past three months. Food prices were still 2.5 percent lower than a year earlier, when the index averaged 215.6 points, and were down from a record 237.9 points in February 2011.
“It’s interesting how commodities are moving in different directions,” Abdolreza Abbassian, an economist at the FAO, said in a phone interview before the report. “It should force people to look less at the average number that the index gives, and pay more attention to individual commodities and trends.”
Dairy prices climbed 2.4 percent last month as hot, dry weather in southern Pacific countries reduced production, the FAO said. The agency’s index of oils and fats increased 0.4 percent amid expectations palm oil output will slow. Weakening demand for soybean oil in biodiesel kept the oils index from rising further, the FAO said.
The FAO’s gauge of world grain prices fell by 0.8 percent to 245.3 points. Wheat futures declined 8.3 percent last month on the Chicago Board of Trade as snowfall in recent weeks improved soil moisture in some areas affected by drought. Rough rice prices added 1.8 percent in Chicago.
“Wheat prices eased in recent weeks, reflecting improved crop prospects in the U.S.,” the FAO said in the report. “The increase in rice prices was mostly a reflection of policy support in Thailand and India and a tightening of supplies in the U.S.”
An index of sugar prices dropped 3.2 percent to 259.2 points, the lowest level since July 2010, on expectations of a world production surplus. The index for meat prices was unchanged at 177.7 points.
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