Global food prices fall for third consecutive month, says FAO

Food prices have fallen for a third month after cereal and palm oil prices fell, says the FAO.

The FAO Food Price Index was down for a third consecutive month in June, as good supply and improved global production prospects for wheat, maize and palm oil lowered prices.

The Food and Agriculture Organisation of the United Nations (FAO) today confirmed that global food prices fell for the third month running on the back of the falling prices of cereal and vegetable oil and improved global supplies. However, the organisation warned that conflicts and adverse weather continue to threaten food security in many countries.

The Food Price Index, based on the prices of a basket of internationally-traded food commodities, averaged 206.0 points in June 2014, down 3.8 points (1.8%) from May and nearly 6 points (2.8%) below the June 2013 level.
The index had risen to a ten-month high of 213 points in March 2014, but fell in April, May and June, mainly as a result of lower cereal, vegetable oil and dairy prices. Sugar prices also declined in June from May, but remained up from last year, while in contrast, meat prices on average increased from May.

Supply and demand
The FAO Cereal Price Index averaged 196.2 points in June, down 10.9 points (5.2%) from a revised value in May and 36.1 points (15.6%) below last year. The slide was mainly caused by lower wheat and maize prices, both of which fell by close to 7% amid further improved crop prospects and diminishing concerns over possible disruption of shipments from Ukraine, said the FAO.
Vegetable oils averaged 188.9 points in June, down 6.4 points (3.3%) from May, in part reflecting a 9-month low in the price of palm oil - the most widely traded edible oil.
Meanwhile dairy prices averaged 236.5 points in June, down 2.5 points (1.%) over May, a less substantial decline than the previous three months. Meat prices, however, rose slightly - averaging 194.2 points in June, which is 1.4 points (0.7 %) more than in May. The fact that meat prices continue to rise while cereal and oil prices fall is reflection of constrained world supplies, said the FAO.

Cereal forecast

The latest forecast for world cereal production in 2014 now stands at 2 498 million tonnes - including rice in milled terms - , is 18 million tonnes up from the previous figure in June, although still 1 percent (23 million tonnes) below last year's record output, said the FAO, adding that the recent revision reflects improved production prospects for coarse grains and wheat crops - particularly in the United States, the EU and India.
Despite increased supplies and lower average prices, the latest FAO report also warned that many people in conflict and drought stricken areas require external assistance for food.

Related News

Leverage points: It may be possible to feed billions more people using only existing croplands, says the report

Study pinpoints key 'leverage points' to feed more people with existing land

Food prices hit six month low, says FAO

Food prices hit six month low, says FAO

Countries that depend on food imports may become more vulnerable in periods of food shortage as populations grow and the effects of climate change impact crop availability, say researchers.

Global food trade may not meet future demands, warn researchers

Dairy, cereal and vegetable oil prices down, but sugar is up, according to FAO Food Price Index

FAO: Food prices down as weather and Black Sea tensions improve

FAO outlook: Climate and politics impact to food markets but 2014 stocks remain adequate

FAO outlook: Climate and politics impact to food markets but 2014 stocks remain adequate

FAO: Ukraine-Russia tensions and poor weather lead to sharp rise in food prices

FAO: Ukraine-Russia tensions and poor weather lead to sharp rise in food prices

Global wheat production will drop by 2%, the FAO forecasts

FAO: 2014 wheat production to drop amid record cereal trading

Sugar prices saw some of the biggest increases during February

Global food prices rise on strong demand and poor weather

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.