Global food prices have fallen to the lowest level in four years led by dairy products, sugar and cooking oils on higher supplies, according to the Food and Agriculture Organisation.
Global food prices as measured on the FAO food index declined for the fifth consecutive month in August.
The index averaged at 196.6 points in August, as against 204.5 points in the same month last year, the Rome-based FAO said in its latest report.
The index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar.
"The FAO food price index averaged 196.6 points in August 2014, its lowest level since September 2010.
Except for meat, all the other food sub-indices dipped markedly in August, with dairy values falling most, followed by oils and sugar," the UN food agency said.
The cereal price index fell by 1.5 per cent to 182.5 points in August from the previous month, it said, adding that prices of cereals have been falling continuously since May, largely on excellent crop prospects and abundant supplies of wheat and coarse grains.
Another record world production this year weighs on international wheat prices, which slid in August to their lowest value since July 2010. Similarly, maize prices have fallen to a four-year low, amid almost ideal growing conditions while stocks are already at very high level.
However, rice prices remained on the rise reflecting the return of several traditional importers to the market and the failure by Thailand to offload large volumes from public stocks starting in August, as originally announced.
The vegetable oil price index also fell by 8 per cent to 166.6 points in August from the previous month and the lowest level since November 2009.
"It would also be the fifth month of consecutive drops in the index.
Much of the August decline reflects the pattern of palm oil prices, which have weakened under the combined effect of improved production prospects in South East Asia and lower than anticipated import demand, primarily from China and India," the FAO said.
The other major oils (soy, rape and sunflower) also remained on a downward trend, reflecting prospective ample supplies in 2014-15, it added. According to the FAO, dairy price index fell by 11.2 per cent in August from previous month, and a 18.9 per cent dip year-on-year.
"The decline reflected both abundant export availability and reduced import demand. Export supplies have increased in the EU and conditions are favourable for a strong start to the new season in Oceania," the UN body said.
The prevailing tendency for prices to decline was further exacerbated by the Russian Federation prohibition, at the beginning of the month, on imports of dairy products from several countries, it said.
Slackening import of whole milk powder by China (the largest importer) has also contributed to market uncertainty concerning demand over the coming months, it added. Sugar prices fell by 5.7 per cent to 244.3 points in August from over previous month but still one per cent higher than in August 2013. FAO said the significant drop in prices was triggered by improved production prospects in India, the world’s second largest sugar producer, as well as the European Union and the Russian Federation. In addition, reports of lower than expected import demand by China weighed negatively on international prices.
The downgrading of production in Brazil, the world largest sugar producer, was not sufficient to offset the downward price pressure, it added. However the meat price index rose to 207.3 points in August, 1.2 per cent higher than its revised value for July and 14 per cent above last year.
The increase principally reflected a strong rise of bovine meat prices in Australia, where herd rebuilding has reduced export supplies, and continued strong import demand in Asia, particularly China, it said.
