Prices for the major food commodities fell by 1.4 percent during May, to their lowest levels since September 2009, said the UN Food and Agriculture Organization. Its Food Price Index, at a reading of 166.8, was down by 20.7 percent in one year. Prices for meat, dairy products and cereal grains fell in May. For the two other sectors of the index, sugar and vegetable oils, prices were up in May. Vegetable oil prices rose during May because of concerns that the El Nino weather pattern would reduce production in southeast Asia.
In a companion report, FAO raised its forecast of world grain production by 15 million tonnes, to 2.524 billion tonnes, or only 1 percent below the record 2014 harvest. Due to “more buoyant prospects for China and West African countries,” the world rice crop would be 1.3 percent larger than the record set last year of 494.2 million tonnes. Cereal stocks would remain at nearly 25 percent of use, “reinforcing the view of stable cereal markets” and prices. Wheat stocks are projected to climb to a 13-year high of 201 million tonnes.
The Food Price report said cereal grain prices dropped by 3.8 percent in May. “Ample stocks combined with generally favorable crop outlooks for this year continued to keep international prices under downward pressure,” said FAO. The May index was down by 22 percent from the previous May and the lowest level since July 2010 for cereals. Dairy prices were down by 2.9 percent due to the “flush” season for milk production in the northern hemisphere and large stockpiles in Europe and New Zealand. “Generally lower prices for meat exports from the United States” were a primary factor for a 1-percent drop in global meat prices.