Friday, January 10, 2014

World Food Prices Dropped Last Year

World food prices fell by 1.6% in 2013, down 8.8% from their all-time peak in 2011, driven by falling international prices for grains, sugar and palm oil, according to the United Nations’s Rome-based Food and Agriculture Organization Thursday. The Food and Agriculture Organization’s monthly index measures the monthly change in international prices of a basket of food commodities and is the global leading economic indicator for food prices. While the most recent food price spike in 2011 was triggered by a lack of cereal supply, the recent fall in food prices is mainly due to higher expected supplies of corn and wheat this year. The sharp increase in 2013 cereal production is due to a rebound in the U.S. corn crop and record wheat harvests in countries in the Commonwealth of Independent States. Favorable weather in several leading producer nations such as the U.S. has boosted hopes of significant increases in corn output and led the U.S. Department of Agriculture to forecast a record U.S. corn crop for this agricultural season. Global cereal stocks are thus anticipated to increase 13% in 2013 to 564 million metric tons, according to U.N. data. Still, an uptick in both dairy and meat prices late last year limited the slide, warns the U.N. Both dairy and meat prices hit record highs because of drought in the world’s top milk exporter New Zealand and strong demand for meat from Asia. “Demand for milk powder, especially from China, remains strong and processors in the southern-hemisphere are focusing on this product rather than on butter and cheese,” the U.N. said. China and Japan’s demand for meat also helped prices climb 1.1% in 2013. “Demand from China and Japan has resulted in beef prices showing consistent growth since the middle of the year,” said the U.N...more

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