Global Food Prices Continue to Drop

The Food and Agriculture Organization released its Food Price Index, a measure of the monthly change in the international prices of a basket of food commodities. It reports that commodity price index has dropped for the fourth month in a row in August, reaching its lowest level since June 2012. The index averaged 201.8 points in August 2013, nearly 4 points (1.9 percent) below its July value and 11 points (or 5.1 percent) less than in August 2012.

The decline was driven by continued falls in the international prices of cereals and oils, although dairy, meat and sugar prices rose slightly. There was a strong growth in world cereal production and a sharp recovery in maize supplies which would originate from the US. Maize productions in the US is forecast to reach 343 million tonnes this year, 25% higher than 2012 drought-reduced level.

Hence, global cereal utilization in 2013/14 is projected at 2413 million tonnes, down marginally from the previous forecast, but still 3.2 percent higher than in 2012/13. Similarly, the forecast of world cereal stocks at the close of seasons in 2014 has been raised slightly since July, to 569 million tonnes, primarily on expectations of higher maize inventories.

See the news release at  http://www.fao.org/news/story/en/item/195887/icode/