UNITED NATIONS: The price of food has dropped worldwide to an all-time, five year low, the UN agricultural agency reported.

The Food and Agriculture Organisation’s (FAO) price index — which measures monthly changes in the global price of a basket of meat, dairy, cereals, oils and fats, and sugar — averaged 196.6 points last month which is a 7.3 point (3.6 per cent) decrease compared to July. With the exception of meats, prices for all of the commodities measured by the index dipped markedly.

According to a statement to the press, FAO’s sub-index for dairy products averaged 200.8 points in August, down 25.3 points (11.2 per cent) versus July and 46.8 points (18.9 per cent) compared to a year ago- the result of abundant supplies for export coupled with reduced import demand.

Russia’s prohibition at the beginning of the month on imports of dairy products from several countries helped depress prices, while slackening imports of whole milk powder by China (the world’s largest importer) also contributed to market uncertainty.

Meanwhile, the vegetable oils sub-index clocked in at 166.6 points in August, 14.5 points (8 per cent) less than the previous month and the lowest level since November 2009. Sugar prices averaged 244.3 points last month, down by 14.8 points (5.7 per cent) from July.

FAO’s price index for cereals averaged 182.5 points in August, down 2.8 points (1.5 per cent) from last month and 24.2 points (11.7 per cent) versus August 2013.

With 2014 being another record year for wheat production, prices for the staple grain continued to slide in August, reaching their lowest value since July 2010. Similarly, near ideal growing conditions in key producing areas, coupled with abundant stocks, have seen maize prices retreat to a four year low, the index reported.

Published in Dawn, September 13th, 2014