Global food prices, on the decline since last April, are 14-percent lower than a year ago, said the UN Food and Agriculture Organization. The Food Price Index “has now reached its lowest value since July 2010,” said the FAO. Lower prices reflect robust supplies, following a record grain harvest in 2014, as well as the ongoing weakness of many currencies against the U.S. dollar. With “very strong” grain stocks, “the first thing to flag is the favorable outlook for production of a number of crops in 2015,” said FAO analyst Michael Griffin.
This year’s wheat crop is forecast for a near-record 720 million tonnes, down 1 percent from last year’s all-time high of 727 million tonnes, said FAO in its first estimate of the new crop. Yields in Europe and the Black Sea region “are forecast to return to average levels from the previous year’s high,” said FAO’s Cereal Supply and Demand Brief. “In North America and Asia, the outlook is more favorable, mostly on account of an expected improvement in yields; however the larger anticipated crop is not forecast to offset the reduction in Europe.”
Prices for grains, meat and sugar fell during February, said the FAO. The dairy index rose for the first time in a year, up 4.6 percent on higher milk powder prices. The vegetable oil index rose 0.6 percent due to higher palm-oil prices, “even as soy oil prices continued to decline given prospects of bumper soybean harvests in South America.”