The monthly Food Price Index of the United Nations’ Food and Agricultural Organization (FAO) was at 196.6 points in August, down 7.3 points (3.6 per cent) from the previous month and lowest since September 2010. Barring meat, prices of all 65 agri commodities measured by the index shows marked decline in the month.
With the world cereal production forecast scaled up to 2.5 billion tonnes this year, only 0.5 per cent lower than last year’s record high, FAO’s cereal price index averaged at 182.5 points in August, down 2.8 points (1.5 per cent) from last month and 24.2 points (11.7 per cent) lower than August last year.
By the close of the 2015 season, the world cereal stocks could reach 616 million tonnes, 12 million tonnes higher than the previous forecast and six per cent more than the start of the 2014-15 season, FAO estimates.
Wheat output is expected to reach 716.5 million tonnes with the crop in China, Russia, Ukraine and the US likely to be larger than previously anticipated.
Similarly, near-ideal growing conditions in key producing areas, combined with abundant stocks, caused the price of maize to retreat to a four-year low. For rice, however, the production outlook worsened from July by about three million tonnes, as an erratic rainfall pattern and concerns over an El Niño impact on the crop early next year marred prospects in China, India, Indonesia, the Philippines and Sri Lanka.
The vegetable oils sub-index, at 166.6 points in August, was 14.5 points (eight per cent) lower than the previous month and the lowest since November 2009. The index of sugar prices averaged 244.3 points, down 14.8 points (5.7 per cent) from July but still 2.2 points (one per cent) higher than a year ago.
Dairy led the overall decline, with the dairy products index averaging at 200.8 points in August, down 25.3 points (11.2 per cent) from July and 46.8 points (18.9 per cent) from a year ago, mainly because of abundant supplies for export and reduced import demand.