DUSHANBE, March 6, 2015, Asia-Plus – Press release issued by the UN Food and Agriculture (FAO) notes the FAO Food Price Index declined to a 55-month low in February, dropping 1.0 percent from January and 14 percent below its level a year earlier.
Lower prices for cereals, meat and especially sugar more than offset an increase in milk and palm oil prices.
The FAO Food Price Index reportedly averaged 179.4 points in February, down from 181.2 points in January and 208.6 points in February 2014.
Its ongoing decline – to its lowest level since July 2010 – reportedly reflects robust supply conditions as well as ongoing weakness in many currencies versus the U.S. dollar, which appear set to continue.
FAO”s Food Price Index is a trade-weighted index that tracks prices of five major food commodity groups on international markets. It aggregates price sub-indices of cereals, meat, dairy products, vegetable oils and sugar.
The FAO Cereal Price Index averaged 171.7 points in February, down 3.2 percent from January, with booming prospects for wheat output explaining the bulk of the decline. Rice prices were more stable, with aromatic rice quotations increasing markedly, compensating for much the declines observed in the other rice varieties.
The FAO Sugar Price Index averaged 207.1 points in February, down 4.9 percent from January, the sharpest move of any commodity.
The FAO Meat Price Index averaged 187.4 points in February, down 1.4 percent from its revised January value.
The FAO Dairy Price Index rose for the first time in a year, averaging 181.8 points in February, representing a 4.6 percent increase from the previous month.
The FAO Vegetable Oil Price Index averaged 156.6 points, up 0.4 percent from January.
FAO has further raised its estimate of 2014 world cereal production, now seen at 2.542 billion tons, amounting to 20 million tons or one percent higher than in 2013. The bulk of the increase reflects wheat production gains in Argentina, Central Asia and Europe.
With the 2015 winter wheat crop already developing in the northern hemisphere, FAO forecasts that production for the year would amount to 720 million tons, or one percent below the record output of 2014, discounting normal yields in the European Union and Central Asia after strong levels last season.
Globally, 1.107 billion tons of cereals are forecast to be used for food consumption in 2014/15, resulting in a slight increase in average per capita intake to 153.3 kilograms. Cereals used for animal feed are anticipated to grow by 4.0 percent and account for 877 million tons.
FAO forecast for world cereal stocks at the close of the 2014/15 crop seasons has been raised by about 8 million tons since last month to a 15-year high of 631 million tons, with part of the revision resulting from reviewed estimates of previous years” stock levels in China and Ukraine.
