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The
Food and Agriculture Organization's (FAO) food price index fell
0.8 percent in July to 161.9 points, interrupting an upward path
that began after it hit a near seven-year low in January.
Food on international markets was 1.4 percent cheaper than in
July last year, according to the index, which measures monthly
changes for a basket of cereals, oilseeds, dairy products, meat
and sugar.
"This feeling that prices just started to go up one month after
the other may not hold true," FAO senior economist Abdolreza
Abbassian said, suggesting predictions for stable prices for the
next decade made in early July are playing out.
Abbassian said good weather was favoring cereal crops, leading
to bigger supplies. Cereal prices slumped 5.6 percent on the FAO
index in July, and only rice registered a gain.
Vegetable oils were the second biggest loser, falling 2.8
percent mainly due to a five-month low in the price of palm oil
thanks to a recovery in production in Southeast Asia and subdued
global import demand.
July's forecast, made by the FAO and Organization for Economic
Cooperation and Development (OECD), was based on expectations of
higher agricultural productivity and slightly larger crop areas.
Exchange rates also look poised to weigh on prices, Abbassian
said. "If there are no weather surprises we are in for huge
crops. This certainly will have some weight on prices for the
remainder of the season," he said.
(Reporting by Isla Binnie; editing by Jane Merriman)
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