September 12, 2014

Global food prices fall to lowest level in 4 years


Global food prices fell to their lowest level in four years as all major food sectors declined during August with the exception of meat, the United Nations said on Thursday.

The UN's Food and Agriculture Organization said the food price index, which measures monthly price changes in cereals, dairy, meat, sugar and oilseeds, averaged 196.6 points in August, down from 203.9 points a month earlier. The drop was the fifth consecutive month of a decline.

The agency said its cereal price index, which includes grains such as corn, rice, oats and rye, averaged 182.5 points in August, down 2.8 points from July, and 24.2 points, or 11.7 percent, from August 2013. The index has been falling continuously since May following strong global production of wheat, corn and other commodities in the United States and around the world due to favorable growing conditions. The UN said it forecast global cereal production of 2.8 billion tons, just short of an all-time high.

Corn harvest between Dorchester and York. Aerial photography north of York. October, 11, 2010.  Photo by Craig Chandler / University CommunicationsThe United States is on track to harvest 14.395 billion bushels of corn and 3.913 billion bushels of soybeans, both records, the Agriculture Department said Thursday.

The monthly FAO index also showed evidence of the impact of the food and agricultural import sanctions imposed by Russia in July. Dairy prices in August fell to 200.8 points, down 11 percent from July and nearly 20 percent from the same month a year ago.

"Russia's prohibition at the beginning of the month on imports of dairy products from several countries helped depress prices, while slackening imports of whole milk powder by China (the world's largest importer) also contributed to market uncertainty," the agency said.

In the United States, food prices are forecast to rise 3 percent in 2014, with much of that increase coming from soaring prices for beef, pork and eggs, according to the USDA.

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