World food prices hit lowest level in almost six years, UN agency reports

Prices for global agricultural products in July hit their lowest level since September 2009, as sharp drops in the prices of dairy products and vegetable oils more than offset some increases for those of sugar and cereals, the United Nations Food and Agriculture Organization (FAO) confirmed today.

According to the UN agency's monthly Food Price Index, meat prices remained stable. An increase in international prices of bovine meat offset a decline for pig meat and ovine meat, while prices for poultry remained stable.

The trade-weighted index tracks prices on international markets of five major food commodity groups: cereals, meat, dairy products, vegetable oils and sugar.

In July, says FAO, the dairy price index dropped 7.2 percent from the previous month, mainly due to lower import demand from China, the Middle East and North Africa amid abundant EU milk production which has resulted in good availability of dairy products for export.

As for the July vegetable oil price index, it was some 5.5 percent below its June level, reaching its lowest value since July 2009.

The recent slide was primarily caused by a fall in international palm oil prices due to increased production in Southeast Asia combined with slower exports especially from Malaysia. Another reason is a further weakening of soy oil prices on ample supplies for export in South America and a favourable outlook for global supply in 2015/16.

The cereal price index rose by 2.0 percent from June, but was still 10.1 percent below July last year's level. For the second consecutive month, higher wheat and maize prices, in part due to unfavourable weather in North America and Europe, kept the cereal index rising, but rice prices continued to fall.

The sugar price index rose by 2.5 percent from June 2015, largely due to less than ideal harvesting conditions in the main producing region of Brazil.