Milan: World food prices fell 2% in September, reflecting higher grain supplies and weakened demand, the United Nations’ food agency said on Thursday, easing inflation concerns ahead of an expected European Central Bank interest rate decision.
The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 225 points in September, driven 4.5 points down from August by falls in grain, sugar and edible oils prices, the Food and Agriculture Organisation (FAO) said in a statement.
The September Index was 13 points below the 238 points peak hit in February, when it triggered fears of a repetition of the 2008 food crisis which sparked riots in some poor countries.
Global food prices have fallen back in the last few months and remain at historically high levels, although an FAO economist told Reuters Insider TV that prices were likely to remain on a downward trend for some time.
A sell-off on international grain markets in September, with investors worried about a global economic slowdown which may undercut demand, has added pressure on last month’s food prices.
The FAO said it has raised its 2011 cereal output estimate to 2.310 billion tonnes, 3 million tonnes above its previous view, driven by a 4.6% increase in global wheat production, a 3% rise in rice harvests and a 2.1% increase in coarse grains such as maize and barley.
But it also said world cereal markets were likely to remain fairly tight in 2011 and 2012.
“Despite the expected production gains, ... because of the slowdown in the global economic recovery and increased risks of recession, there is uncertainty as regards the impact on world food security,” the Rome-based agency said.
Worsening economic conditions could lead to higher unemployment and lower incomes for the vulnerable and needy in the developing countries, it added.