Food Prices Fell Fourth Month in August on Cheaper GrainsRudy Ruitenberg
World food prices fell for a fourth month in August to the lowest level in more than a year after grain prices declined on an outlook for bigger corn and wheat crops, the UN’s Food & Agriculture Organization reported.
An index of 55 food items tracked by the FAO fell to 201.8 points from a revised 205.6 in July, the Rome-based United Nations agency wrote in an online report today. The gauge is down from a record 237.9 points in February 2011 and at the lowest level since June last year.
World prices for corn fell 14 percent last month, the FAO said. Global production of the grain will jump 11 percent to 957.1 million metric tons in 2013-14 as U.S. output surges 28 percent, the U.S. Department of Agriculture forecast last month.
The drop in grain prices “is consistent with expectations for strong growth in world cereal production this year and especially, a sharp recovery in maize supplies,” the FAO said, using another name for corn.
The FAO’s grain price index fell 7.2 percent to 210.9 points last month from 227.3 in July, the lowest level since September 2010.
“The fall reached 14 percent in the case of maize in spite of some late-month gains on concerns over drought and heat-stress conditions in the U.S.,” the FAO wrote.
In a separate report, the FAO lifted its outlook for 2013 world grain production by 13.6 million tons to 2.49 billion tons on an increased outlook for production of wheat and coarse grains such as corn and sorghum.
The FAO’s gauge for cooking oils and fats dropped 3 percent to 185.5 points. The dairy price index gained 1.2 percent last month to 239.1. It reached a five-year high in April as drought cut supplies in New Zealand, the world’s biggest exporter of milk products.
The FAO’s meat price index advanced 1.3 percent to 175 points, while the sugar index rose 1.1 percent to 241.7 points on estimates indicating Brazil is using more sugarcane for ethanol production rather than sweetener.
The global food-import bill will probably be stable this year at $1.094 trillion as cheaper sugar and cooking oil make up for rising prices of dairy, fish and meat, the FAO predicted in June.