UNITED NATIONS: Global food prices continued to decline in March — dropping some 40 points below last year’s level — with sugar prices sliding to their lowest level since February 2009, according to the United Nations Food and Agricultural Organisation (FAO)

Noting a 1.5 per cent drop since February and 18.7pc overall descent from a year ago, FAO concluded that the dipping prices for vegetable oils, cereals and meat more than offset a rise in dairy prices — contributing to the lower index, which in March averaged 173.8 points.

The FAO Food Price Index is a trade-weighted guide that aggregates price sub-indices of cereals, meat, dairy products, vegetable oils and sugar prices on international markets.

On a downward path since April 2014, abundant supplies and the rising US dollar have pushed down international prices of most food commodities. Mainly due to improved crop prospects, sugar dropped a sharp 9.2pc since February to 187.9 points in March. The continued weakening of the Brazilian currency against the US dollar also contributed to the change.

A 2015 downward trend in cereal prices, which averaged 169.8 points in March — down 1.1pc from February and some 18.7pc below its level a year earlier — is attributable to large export supplies and mounting inventories, in particular for wheat and maize. Witnessing nearly a 3.1pc drop since February, the vegetable oil averaged 151.7 points in March – its lowest value since September 2009.

Also, meat averaged 177 points, down 1pc from its revised February value, while dairy rose for the second consecutive month to average 184.9 points, a 1.7pc increase from February.

Meanwhile, according to FAO’s latest Cereal Supply and Demand Brief, due to a larger than anticipated maize harvest in the European Union (EU), the 2014 cereal output estimate was raised to 2,544 million tonnes, which, if confirmed, would outstrip the 2013 record by 1pc.

Rice production prospects for 2015 are generally positive in the southern hemisphere, with sizeable increases forecasted in Indonesia, Sri Lanka, Colombia and Paraguay. By contrast, Australian output is officially anticipated to fall by 18pc, reflecting lingering shortages of irrigation water.

Published in Dawn, April 3rd, 2015

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