Catherine Hornby Rome
Global food prices were not expected to fall much further after dipping to their lowest level in three years last month, the UN food agency said yesterday, trimming its estimate for 2013/14 world cereals output.
The decline in prices last month was driven by a sharp fall in the cost of grains, while dairy, meat and sugar prices all rose, the Food and Agriculture Organisation (FAO) said.
Food prices surged during last year’s northern hemisphere summer due to a major drought in the US but prospects for a rebound in cereal supplies to record levels have reversed the price trend this year. The FAO’s index measuring monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 199.1 points in September, from 201.4 points in August.
The index has fallen for five consecutive months and has reached its lowest level since September 2010.
“There is still some room for prices to go down but not significantly,” FAO senior economist Abdolreza Abbassian said. “Anything that happens now on the negative side could push up prices again.”
The FAO is due to hold a second ministerial meeting on food price volatility at its Rome headquarters on Monday, with 40 ministers expected to attend.
Its first meeting last year was meant to tackle the third spike in grain prices in four years. Even though prices had fallen from their peaks, the FAO said it wanted to hold another meeting as markets were still vulnerable to supply shocks.
The agency said it had slightly trimmed its forecast for world cereal output in 2013/14 to 2.489 billion tons, 3 million tons lower than a previous estimate, but still 8 percent higher than last year.
It cut its forecast for world wheat output to 704.6 million tons from 709.8 million tons, mainly due to poorer prospects for the South American crop.
Excessive moisture was also hampering the harvest in the Black Sea region and affecting planting for next year, he said.
He added that exportable supplies in major wheat exporters were tighter compared with last year. – Reuters