Global food prices declined the most in nearly seven years during August, thanks to ample supplies, falling energy prices and worries over China's economic slowdown, the Food and Agriculture Organization said in a report released on Thursday.
The FAO Food Price Index fell 5.2 percent month-on-month to 155.7 points in August, marking its steepest monthly drop since December 2008. Virtually all major food commodities registering sharp declines, the Rome, Italy-based UN agency said.
Among the five major food commodity groups tracked by the index, prices for sugar logged the biggest decline of 10 percent. That was largely attributed to the weaker Brazilian real and firmer expectations that India, the world's second largest sugar producer, will become a net exporter in the current 2015/16 season.
Dairy prices fell 9.1 percent led by a substantial drop in prices for milk powders, cheese and butter that was mainly due to softening import demand from China, the Near East and North Africa.
The vegetable oil price index dropped 8.6 percent from July, touching its lowest level since March 2009. The fall was largely due to a six-and-a-half year low in international palm oil prices, mainly the result of slowing import demand, notably by India and China, amid expectations of rising production, the report said.
Cereal prices decreased 7 percent, mainly driven by falling wheat and maize prices that reversed two consecutive months of modest increases. Continued improvements in production prospects for 2015/16 were largely behind the cereal price slides, the FAO said.
Citing more buoyant production prospects for coarse grains, wheat and rice, the FAO raised its forecast for global cereal production this year to 2,540 million tonnes, 13.8 million tonnes more than expected in July. Yet, the figure was 0.8 percent below the 2014 record.
The FAO also raised its projection for global coarse grains output by 7.5 million tonnes to 1,311 million tonnes, yet it was 1.5 percent less than the 2014 record.
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