World food prices hit a seven-year low in August 2015, down 5.2% from July 2015, the Food and Agricultural Organisation (FAO) has said.
The FAO Food Price Index now at 155 points is a measure of the monthly change in international basket prices of cereals, vegetable oil, dairy, meat and sugar.
This drop in prices was the sharpest monthly drop since December 2008.
The FAO said that in addition to ample supplies, a number of other factors contributed to the decrease, including the slump in energy prices and concerns about China’s economic slowdown and its negative consequences on the global economy and financial markets.
Dairy prices
The FAO Dairy Price Index averaged 135.5 points in August, down 13.6 points (9.%) from July.
As in the previous three months, milk powders were most affected, although cheese and butter prices also dropped substantially, it said.
Limited import demand from China, the Near East and North Africa continued to weigh on international dairy markets, the FAO said, especially as export availabilities remained generally ample.
As seasonal milk production shifts from the northern to the southern hemisphere, attention is turning to developments in the newly-commenced dairy year in Oceania, it said.
Meat prices
The FAO Meat Price Index averaged 172.9 points in August, virtually unchanged from the previous month.
International prices of ovine meat moved up somewhat, it said while those for other types of meat were stable.
Nevertheless, compared to the index’s historic peak in August 2014, overall prices were down by 18%, the FAO said.
It said that pig and ovine meat the most affected, although poultry and bovine meat quotations also slid markedly over the period.
Cereal prices
The FAO Cereal Price Index averaged 154.9 points in August, down 11.6 points (7.0%) from July and 27.6 points (15.1%) from last year.
The decline in August, which reversed two consecutive months of modest increases, brought the index down to its lowest level since June 2010, according to the FAO.
Falling wheat and maize prices were the main factors for the downturn although rice prices also weakened in August, it said.
The FAO said that abundant wheat supplies, supported by larger than anticipated harvests in the northern hemisphere, where the season is coming to a close, pushed down wheat values.
Maize prices dropped too, mainly on improved production prospects in the US and expected larger sales from Brazil this season, it said.