Lower dairy and vegetable oil prices helped pull down the Food Price Index to its lowest reading since September 2009, said the FAO: “Prices for dairy commodities fell across the board, with milk powders being most affected, followed by cheese and butter.” Dairy processors in New Zealand cut prices in order to reduce their inventories and an upturn in milk production in Europe meant a large supply of dairy products for export. While dairy prices were down by 7 percent, vegetable oil prices fell by nearly 6 percent. Palm oil production was up in Southeast Asia and favorable prospects for this year’s soybean harvest weighed on prices.
Sugar and cereal grains showed modest increases in price while meat prices were stable. The FAO report covers the five major groups of food commodities. FAO said wheat and corn prices rose for the second month in a row due to adverse weather in the United States and Europe, and rice prices continued to fall.