The FAO Food Price Index continued to decline in January partly due to robust inventories, continued strength in the US dollar and weak crude oil prices.
Food Price Index averaged 182.7 points for the month, or 1.9 percent below its December 2014 level. The index aggregates price sub-indices of cereals, meat, dairy products, vegetable oils and sugar.
‘Lower prices reflect strong production expectations as FAO also raised its 2014 forecast for world cereal production to a record high and noted that early indications for crops in 2015 are favourable,’ the FAO said.
‘The FAO Cereal Price Index averaged 177.4 points in January, down 3.6 percent from the previous month and is now 34 percent below its June 2008 peak. International wheat prices fell by 7 percent from December, reflecting ample supply conditions,’ it said.
The FAO Vegetable Oil Index also fell to 156.0 points, down 2.9 percent from the previous month and is now at its lowest level since October 2009.
The FAO Dairy Price Index was stable in January, averaging 173.8 points as rising butter prices offset a decline in prices for cheese and skimmed milk powders.
The FAO Sugar Price Index averaged 217.7 points, also virtually unchanged from December. Global inventory rate now 50 percent higher than in 2008, the organisation said.
Meanwhile, the cereal output estimate for 2014 was raised to 2,534 million tonnes, driven higher by improved prospects for coarse grains, according to FAO’s latest Cereal Supply and Demand Brief.