Food prices drop to 4-year low as milk to cooking oils slump1 min read . Updated: 11 Sep 2014, 05:21 PM IST
An index of 55 food items dropped 3.6% to 196.6 points, the lowest since September 2010, FAO reports
Paris: Food prices fell to the lowest in almost four years in August as costs of milk, cheese and cooking oils tumbled on signs of rising production.
An index of 55 food items dropped 3.6% to 196.6 points, the lowest since September 2010, the United Nations’ Rome-based Food & Agriculture Organization (FAO) said in an online report on Thursday. The agency’s gauge of dairy prices slumped 11% and the vegetable-oil price index declined 8% to the lowest since November 2009, the FAO said.
Cotton, soybeans, corn and wheat prices fell into bear markets this year as farmers in the US, the largest grain grower, prepare to collect what the government predicts will be record harvests. In the past three years, all agricultural values on the Bloomberg Commodity Index other than cattle and hogs have declined, led by corn, soybean oil and sugar.
“Quotations for all dairy products covered in the index fell," the FAO wrote. “The decline reflected both abundant export availability and reduced import demand."
Dutch spot prices for skimmed milk powder fell 22% last month, the biggest monthly drop since at least 2004, while prices for butter from France slumped 19%.
The FAO’s dairy index declined to 200.8 points from 226.1 points. A trend of falling prices was further exacerbated by Russia’s ban last month on EU dairy imports, the UN agency said.
The vegetable-oil index slipped to 166.6 points from 181.1 points amid an improved outlook for palm-oil production in Southeast Asia and lower-than-forecast import demand from China and India, according to the FAO. Malaysia palm oil futures retreated 15% last month, the most since September 2012.
The FAO cereal price index fell 1.5% to 182.5 points in August. Corn, soybeans and wheat futures are trading near the lowest level since 2010 in Chicago as production is expected to outpace consumption, padding stockpiles. The US Department of Agriculture may forecast later Thursday that corn and soybean harvests in the US, the top grower, will climb to a record, according to a Bloomberg News survey.
Sugar prices declined 5.7% on improved production prospects in India. A gauge of meat costs rose 1.2% to 207.3 points, the highest on record dating to 1990, boosted by rising beef prices in Australia, according to the report. BLOOMBERG