Wednesday, 09 July 2014 13:53

The FAO Food Price Index falls for the third consecutive month, mainly on lower cereal and vegetable oil prices

The FAO Food Price Index averaged 206.0 points in June 2014, down 3.8 points (1.8 percent) from May and nearly 6 points (2.8 percent), below June 2013. Last month’s decline, which was the third in succession, was largely the result of a marked drop in cereal and vegetable oil prices, following further improvements in global production prospects. Although sugar and dairy quotations also edged lower, the falls were far less pronounced. On the other hand, meat prices held steady.

The FAO Cereal Price Index averaged 196.2 points in June, down 10.9 points (5.2 percent) from a revised* value in May and 36.2 points (15.6 percent) below last year. The slide was mainly caused by a weakening of wheat and maize quotations, both of which fell by close to 7 percent, a reflection of a further improvement in world crop prospects and diminishing concerns over disruption of shipments from Ukraine.  By contrast, rice prices were marginally up from May, mostly reflecting the suspension of large public stock sales in Thailand.

The FAO Vegetable Oil Price Index averaged 188.9 points in June, down 6.4 points (3.3 percent) from May and 4.6 points (2.4 percent) below June 2013. Quotations for palm oil, the most widely traded edible oil, fell to a 9-month low last month, as seasonally high output coincided with subdued global import demand. Similarly, soy oil prices dropped to a 4-year trough on abundant availabilities in South America and anticipation of a record world soybean production in 2014/15. Prospects of ample sunflower and rapeseed oil supplies in 2014/15 also weighed on the index.


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