Staff of Reuters 3 Minutes to Read Reuters – ROME (Reuters) – The United Nations food agency reported on Thursday that world food prices declined for the first time in a year in June, owing to falls in vegetable oils, cereals, and dairy products. FILE PHOTO: On July 24, 2015, at the Plaza de Dia market in Madrid, Spain, vegetables are on show at a fruits and vegetable stall. The photo was taken on July 24, 2015. REUTERS/File Photo/Juan Medina In a statement, the Rome-based FAO also predicted that global cereal harvests will reach roughly 2.817 billion tonnes in 2021, slightly lower than its previous forecast but still on track to set an annual record. Last month, the Food and Agriculture Organization’s food price index, which measures monthly changes for a basket of grains, oilseeds, dairy products, meat, and sugar, averaged 124.6 points, down from 127.8 in May. Previously, the figure for May had been provided as 127.1. In June, prices increased by 33.9 percent year over year. In June, the FAO’s vegetable oil price index fell 9.8%, owing in part to a drop in palm oil prices, which were hurt by predictions of increased output from top producers and a lack of new import demand. Quotes for soy and sunflower oil have also reduced. In June, the cereal price index fell 2.6 percent month over month, but was still up 33.8 percent year over year. Because of higher-than-expected harvests in Argentina and improved crop conditions in the United States, maize prices plummeted 5.0 percent. As high freight costs and container shortages continued to hinder export sales, international rice prices plummeted in June, reaching 15-month lows, according to the FAO. On a monthly basis, dairy prices fell 1.0 percent, with all index components falling. Butter saw the steepest reduction, owing to a sharp drop in worldwide import demand and a minor increase in stockpiles, particularly in Europe. The sugar index increased by 0.9% month over month, reaching its highest level since March 2017. Uncertainties about the impact of bad weather on crop yields in Brazil, the world’s largest sugar exporter, pushed prices up, according to the FAO. The meat index increased by 2.1 percent in May, with prices for all types of meat rising as rises in imports from some East Asian countries offset a slowdown in China’s meat purchases. The modest drop in FAO’s prognosis for global cereal production this year was mostly caused by a dramatic reduction in Brazil’s maize production forecast as prolonged periods of dry weather weighed on yield forecasts, according to FAO. The outlook for global wheat production has also deteriorated this month, as dry weather in the Middle East has harmed crop predictions. The prediction for worldwide rice output in 2021, on the other hand, has risen slightly. The world cereal usage prediction for 2021/22 was reduced by 15 million tonnes from the previous month to 2.810 billion tonnes, still 1.5 percent higher than in 2020/21. For the first time since 2017/18, world grain stocks are likely to rise beyond their opening levels by the end of the season in 2021/22. “The bulk of this month’s upward revision to world cereal inventories is due to higher maize stocks expected in China,” the FAO said. Crispian Balmer did the editing./n
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