UN Food Price Index shows further decline

The United Nation’s Food and Agricultural Organisation Food Price Index averaged 205.9 points in July, 2 per cent below its value for June and 3.3 per cent lower than in July 2012. The results were published recently.

According to John Keane, Milan Office Manager, of Bord Bia, the decline in July, which was the 3rd consecutive monthly drop, was largely due to lower International prices for grains, soy, sugar and dairy produce.

The global Cereal Price Index for July was down 3.7 per cent from June and 13 per cent below July 2012.

“This sharp drop mostly reflected falling maize prices as favourable weather conditions boosted hopes of a significant production increase in several leading maize producing countries,” he added.

The global Dairy Price Index for July was 1 per cent lower than a year earlier.

“While prices fell overall, the decline was smaller than the previous two months due to a tightening of supplies in New Zealand and Australia and stagnant milk output in Europe, the US and South America,” Keane added.

The global Meat Price Index for July was largely unchanged from June. “Prices for pigs and poultry were lower while prices for beef and sheepmeat rose. Overall, there are some signs that International prices for meat are weakening in the face of reduced import demand especially from Asia,” the Bord Bia manager explained.

The Sugar Price Index declined for the fourth consecutive month on the back of anticipated large surplus production in major production areas, notably Brazil, the world’s largest sugar producer and exporter.

“Declining ethanol prices in Brazil also provided an incentive to convert more sugar cane into sugar instead of ethanol which put additional downward pressure on International sugar prices,” he concluded.

Full details on the FAO Food Price Index are available here.