ROME (Reuters) — Global food prices fell one percent in February to their lowest in more than four and a half years, says the Food and Agriculture Organization.
Cereals, meat and sugar declined, oil was steady and only dairy prices rebounded sharply, the United Nations agency said.
The FAO’s price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 179.4 points last month, 1.8 points below its reading in January.
High global production, low crude oil prices and limited demand from major importers, including China, have helped cap food prices for the past year, and the index has now been declining since April to reach its lowest since July 2010.
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Cereal stocks at the end of the 2014-15 season are now forecast to reach 630.5 million tonnes, up almost eight million tonnes from a previous reading to reach their highest levels in 15 years.
FAO’s forecast for world cereal production in 2015 reached 2.542 billion tonnes, eight million tonnes above the forecast made in January.
Cereal prices were down 3.2 percent from January, with wheat prices sharply lower on better production prospects and large inventories.
Meat prices fell 1.4 percent, pulled down by cheaper beef, mutton and lamb that outweighed stable poultry prices and higher pork prices.
Pork prices were bolstered after eight months of decline by the announcement of European subsidies for private storage.
Sugar prices fell 4.9 percent from January because of higher output from Brazil, a weakening in the Brazilian real currency and the announcement of sugar export subsidies from India.
A slight rise in palm oil prices lifted the vegetable oil price index by .4 percent, following floods in Malaysia and an increase in biodiesel subsidies in Indonesia.
Dairy prices showed the strongest gains, rising 4.6 percent from January to post their first increase in a year. The increase was caused by drought in New Zealand, limited export supplies from Australia and a curb in European production to avoid breaching output quotas.
