Except for a small dip in July, the Food and Agriculture
Organization's (FAO) food price index has been increasing
steadily since January, when it hit a seven-year low.
The index, which measures monthly changes for a basket of
cereals, oilseeds, dairy products, meat and sugar, averaged
170.9 points in September, 2.9 percent above the month before
and 10 percent higher than the same month last year.
Sugar prices surged 6.7 percent in September from the previous
month, largely because of bad weather in Brazil, the world's
biggest sugar producer and exporter, FAO said.
While cereal prices declined slightly, meat edged up and dairy
and vegetable oil prices increased.
"A lot of the September increase has to do with sugar, so if
sugar were to stop increasing, the index would be more or less
flat," said FAO senior economist Abdolreza Abbassian. "But the
scope for big declines is not there."
FAO raised slightly its forecast for world cereal production in
the 2016-17 season rose to 2.569 billion tonnes, which would be
a new record high and a 1.5 percent increase on the previous
season. World wheat output is seen at 742.4 million tonnes, up
slightly from the previous forecast of 740.7 million tonnes.
Cereal stocks are seen at 659.9 million tonnes in the 2016-17
season, down slightly from the previous month's forecast.
(Reporting by Steve Scherer. Editing by Jane Merriman)
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