World food prices fall for second month in a row

Global food prices were lower in May for the second consecutive month as lower dairy, cereal and vegetable oil prices counteracted rising sugar and firm meat prices, the United Nations Food Agency said, according to Reuters.

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The Food and Agriculture Organisation’s (FAO) food price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 207,9 points in May.

This was a drop of 2,5 points, or 1,2%, from April, when food prices fell, led by a sharp drop in dairy prices due to reduced buying in China and Russia and an extended season in New Zealand that boosted stocks. Dairy prices continued to fall in May, by 12 points from the previous month.

The FAO’s cereal price index was lower at 204,4 points, a 2,4 point decrease from the previous month. The agency raised its world cereal production forecast to nearly 2,48 billion tons, almost 1% higher than the month before.

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This was 1,4% lower than 2013’s record world output, but would still be the second largest production ever, said Reuters.

The FAO forecast world cereals stocks at the end of crop seasons in 2015 to be 576 million tons, an increase of almost 10 million tons from last month’s forecast. World wheat production was forecast at nearly 703 million tons, 12,6 million tons below 2013’s record harvest.

Wheat prices, which had contributed to price rises in recent months partly due to fears of disrupted trade flows from Ukraine, fell as shipping patterns from the country remained regular and weather conditions improved, the FAO said in a press statement.