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The
Food and Agriculture Organization's (FAO) food price index,
which measures monthly changes for a basket of cereals,
oilseeds, dairy products, meat and sugar, averaged 156.7 points
in November against a revised 159.3 points the month before.
The 1.6 percent decreased follows two consecutive months of
gains, although food on international markets in November
remained 18 percent cheaper than one year ago, FAO said.
The index has been sliding for most of the past 20 months,
thanks partly to an abundant global supply, and is still less
than two points above a six-year low hit in August.
A strengthening dollar, which is the benchmark currency for
commodities, may drive prices lower in coming months, FAO senior
economist Abdolreza Abbassian told Reuters.
"All the indications are for the (dollar) exchange rate to rise,
especially if the Fed raises interest rates," Abbassian said.
"Exchange rates have been driving the decline in prices. One
cannot exclude further downward pressure on prices in coming
months," he said. One exception may be sugar, he said.
Federal Reserve Chair Janet Yellen said on Wednesday she was
"looking forward" to a U.S. interest rate hike that will be seen
as a testament to the economy's recovery from recession. Her
comments drove the dollar to its highest level since March 2003.
[ID:nL1N13R1ZA]
FAO cut its forecast for world cereal output in 2015-16 to 2.527
billion tonnes, from a previous estimate of 2.530 billion tonnes.
It lowered its world wheat output forecast for 2015/16 to 734.5
million tonnes from 736.2 million tonnes previously.
(Reporting by Steve Scherer, editing by William Hardy)
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