Food Prices Slide a Sixth Month to Four-Year Low as Grains Fall

October 9, 2014 05:31 AM
 
Food Prices Slide a Sixth Month to Four-Year Low as Grains Fall

World food prices fell for an sixth month in September, the longest slide since 2009, as costs of dairy, grains, cooking oils and sugar declined.

An index of 55 food items dropped 2.6 percent month-on-month to 191.5 points, the lowest since August 2010, the United Nations’ Rome-based Food & Agriculture Organization said in an online report today.

Soybeans and corn are trading near the lowest in four years in Chicago amid an outlook for record U.S. harvests. In the past two years, all agricultural products on the Bloomberg Commodity Index other than cattle, hogs and coffee have declined, with the slide led by corn, wheat and soybeans.

“Sugar and dairy weakened the most, followed by cereals and oils,” the FAO wrote. “Among the underlying factors, the U.S. dollar’s broad appreciation continued to weigh on all international commodity prices.”

The index declined 6 percent year on year, falling from the year-earlier period for a 15th month. That’s the longest such slide since a slump of more than three years that ended in June 2000.

A gauge of dairy prices dropped 6.5 percent from August, with all products in the index falling, particularly skimmed milk power, the FAO said.

“The continued decline in prices reflects abundant export availability, above all in Oceania,” the agency said. In the European Union, output of butter and skimmed milk powder rose as producers switched from production of cheese for Russia, according to the report.

The grain price index fell 2.5 percent to 177.9 points, with “good production” and large quantities available for export weighing on prices for wheat and corn, according to the UN agency.

Vegetable Oils

 

An index of vegetable oil prices declined 2.8 percent to 162 points in September amid an outlook for ample palm-oil production in Southeast Asia and better-than-expected soybean yields in the U.S.

 

“The main driver behind the slide remains palm oil, whose prices dipped to five-year lows as abundant production coincided with weak import demand,” the FAO wrote.

Sugar prices declined 6.6 percent to about 228 points as world production is expected to exceed consumption.

A gauge of meat costs rose to 207.8 points, the highest on record dating to 1990, on rising beef export prices in Australia. Prices for pig meat are falling as production recovers from disease, the FAO wrote.

Meat “prices are currently at historic highs and the lack of an increase this month may indicate that, overall, they have reached a peak,” the FAO wrote.

 

 

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